It would have been unusual not to start the year seeing a few changes when studying the legislation on environmental product fee rules. Amongst other things there have been changes to export chain transactions, and the group of vehicles where a flat-rate product fee may be chosen has been expanded. We also find some amendments regarding the statements related to advertisement paper, while the product fee codes have changed from 2017 (packaging and environmental protection codes). Below we go into some detail on these and other important legislative changes regarding environmental product fees.
Clarification of chain transaction rules
Under the environmental product fee rules in effect from 1 January 2017 there is no product fee liability when the ownership of a domestic product subject to a product fee is transferred for the first time to a business organisation established in Hungary for business purposes, or registered in Hungary, if it is verified that the product subject to the product fee was transported abroad to a foreign place of destination or was sent abroad as a postal consignment.
The legislator adding the expression “for the first time” to the wording of the law from 1 January 2017 clearly shows that the exemption condition above only relates to chain transactions with three parties.
The law defines the first of the three parties as the holder of the ownership right to the domestic product subject to the product fee, who is generally subject to paying the product fee if the ownership right is “transferred to a business organisation established in Hungary for business purposes or registered in Hungary”.
The second party is the Hungarian business organisation that acquires the ownership right. The third party is a delivery address abroad. The wording of the law does not name the third party, and instead requires a verified delivery to a foreign address. The verified delivery of the product to a foreign address starts from the first party, but the second party or even the final foreign customer can initiate the delivery abroad, and in this special case there is no product fee liability.
In light of the above, with export chain transactions involving more than three parties in which products subject to the product fee are sold several consecutive times in Hungary, we definitely recommend reviewing these transactions from a product fee perspective owing to the change in the environmental product fee rules.
Extending flat-rate product fee to more vehicles
The environmental product fee rules valid from 2017 expand the definition of “vehicle”, and therefore the scope of vehicles which can opt for a flat-rate product fee. According to this change, the flat-rate product fee can be chosen from 2017 for buses and vehicles transporting goods as well.
Statements for advertisement paper
In the case of advertisement paper, customers still have to provide a statement to the manufacturer (printer) in 2017 on whether the ordered product qualifies as advertisement paper or not. However, from 2017 the lack of such statement means the printer will be subject to payment of the product fee, while previously, if the customer did not provide the statement, then the printer could decide at its discretion whether the given product qualified as advertisement paper or not, and therefore was it subject to a product fee or not.
Changes in product fee codes
The structure of packaging (CSK) and environmental protection (KT) codes has changed from 2017 as well. Since products subject to the product fee are recorded and declared based on CSK and KT codes, we recommend studying Schedule 1 to the Implementation Decree (Government Decree 343/2011), and where changes have been made then the records should be modified accordingly, in order to ensure that the new and updated codes are used in the product fee returns to be submitted for the first quarter by 20 April.
Other changes to environmental product fee rules
From 2017, plastic freezer bags will no longer qualify as plastic advertisement shopping bags, but as plastic packaging. This reclassification means the product fee rate so far of HUF 1,900/kg (EUR 6) drops to HUF 57/kg (EUR 0.18).
Furthermore, no product fee has to be paid from 2017 for plastic bags used to collect separated waste, and for packaging made entirely from raw material derived from renewable sources and biodegradable plastic. Please note, however, that a return still has to be filed for these products.
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