Deposit system – new VAT settlement rules from 2025

A new deposit system will come into effect in Poland on January 1, 2025. As a result, reverse vending machines for returning bottles may become a permanent feature in many stores. The new system aims to improve recycling efficiency in Poland, enhance environmental protection, and provide additional income opportunities for participating entities. What are the changes to the regulations, who do they affect, and how will they impact VAT settlement rules?

What is a deposit system?

In practice, a deposit system is a mechanism in which consumers pay a deposit – an additional fee – when they buy goods in specified packaging. This deposit is returned when the packaging or packaging waste is returned to special collection points.

The law introducing the deposit system was initially published in 2023 (the Act of July 13, 2023, amending the Act on the Management of Packaging and Packaging Waste and certain other acts). But due to emerging doubts, the project was amended in August 2024.

The new regulations will take effect on January 1, 2025. They will apply to the collection of deposits when selling products in beverage packaging, such as:

• Single-use plastic bottles up to 3 litres,
• Metal cans up to 1 litre,
• Reusable glass bottles up to 1.5 litres.

The amendment also extended the VAT regulations to include single-use beverage packaging, which previously only applied to reusable glass bottles.

On an important note, the new regulations will not require proof of purchase (receipt) – consumers will be able to return packaging at any collection point. The new deposit system regulations stipulate that the deposit is to be collected at each point of sale in the supply chain for products covered by the deposit system.

Who is affected by the new deposit system affect?

The updated deposit system regulations will impose new, expanded obligations on entities placing products on the market, such as producers, importers, or brand owners. As of January 2025, they will be required to collect packaging and packaging waste and meet minimum levels of selective collection for packaging placed on the market, (under penalty of paying a fee for each kilogram of raw materials left on the market – up to PLN 25 per kilogram). The required collection levels are as follows:

• 77% in 2025
• 81% in 2026
• 84% in 2027
• 87% in 2028
• 90% in 2029 and beyond.

The new regulations will also impact retail stores, which will be responsible for collecting and refunding deposits, physically receiving packaging and packaging waste from consumers, handling logistics, and collaborating with the deposit system operator. These obligations will apply to all retail or wholesale units with a floor area of over 200 sq. where beverages in deposit-system packaging are sold. Smaller stores will only be required to handle reusable glass bottles up to 1.5 liters, with participation in other packaging returns being voluntary for them.

The new regulations do not specify how the collection of packaging should be carried out, leaving entities free to choose their own method.

New deposit system and changes in VAT settlement

The deposit collected for packaging covered by the new system will also be settled differently in terms of VAT. The current VAT law regarding deposits collected when taxpayers supply goods in returnable packaging will still apply to packaging not covered by the new system, such as pallets.

Such deposits will not be included in the VAT base unless the buyer does not return the packaging. In such cases, the value must be taxed within 60 days. If a contract specifies a deadline, the VAT base will increase the day after the deadline.

The new deposit system introduces uniform VAT settlement for both single-use and reusable packaging covered by the system. As of January 2025, the deposit will not be included in the VAT base at any stage of the supply chain.

At the end of the calendar year, entities placing products in deposit-system packaging on the market, such as producers or importers, will be required to account for VAT on unreturned deposits for that year. If more packaging is collected than was placed on the market in a given year, the excess will be able to be accounted for the next year or subsequent years.

Separation of VAT payer and taxpayer roles

Under the new system, the VAT taxpayers will be entities placing products in deposit-system packaging on the market, such as producers and importers. However, they will not settle the VAT directly with the tax office. Instead, the role of VAT payers will be assigned to representative entities (operators). Their task will be to settle the deposit with retail and wholesale units and other collection points, as well as to collect and pay the VAT on unreturned deposits collected by producers to tax authorities.

As a result, by January 31 of the following year, the VAT payer (the representative entity) will be required to pay the due VAT on the unreturned deposit value to the relevant tax office. At the same time, the VAT taxpayer will be responsible for reporting the unclaimed deposit in VAT declarations and records. This introduces a separation between the roles of VAT payer and taxpayer in the new deposit system.

In addition to declaring the correct VAT amount (the taxpayer’s responsibility) and paying the tax (the payer’s responsibility), both entities will be required to maintain detailed records for VAT settlements and provide them electronically upon request from tax authorities.

The new deposit system and VAT settlements – support in adapting to the new regulations

The new deposit system creates additional tax and reporting obligations for producers, importers, distributors, and retailers. A new group of single-use packaging will be subject to VAT settlements, and deposit collection and refunding will no longer be limited to the final stage of the supply chain. The role of the taxpayer and the VAT payer in the new deposit system must be distinguished.

If you need support in adapting your business to the new deposit system, tax, and reporting regulations, feel free to contact us. Our experts will help you find your way in the realities of the new deposit system and VAT settlements in light of the new regulations.

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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