Economic operators can expect several changes to tax laws from 2017, including changes to the environmental protection product fee. These changes, however, will be introduced as a standalone amendment, rather than as part of the “omnibus” amending regulations. Accordingly, on 5 December 2016, Act CXXXIX of 2016 was published in Issue No. 191/2016 of Magyar Közlöny (the official gazette of the Hungarian State), which includes the amended provisions of Act LXXXV of 2011 on the Environmental Protection Product Fee (“Product Fee Act”) effective from 1 January 2017.
Notable changes to the Product Fee Act: extension of the scope of the flat fee imposed on motor vehicles; clarifications to the rules on chain transactions; changes to the fee payment obligation for paper-based advertising materials; and simplifications to the rules on individual waste management. Other changes include removing flexible cooler bags from the product category of plastic shopping bags, and abolishing the obligation to pay the product fee on goods recycled from products subject to the product fee that have become waste in Hungary. Below is a summary of the key changes mentioned above.
As a result of extending the scope of the flat fee for motor vehicles, from 1 January 2017, this type of fee payment will be applicable to buses classified under customs tariff number 8702, and to commercial vehicles classified under customs tariff number 8704.
Concerning chain transactions, the following clarifications have been made:
- The first domestic buyer may assume the product fee liability from the party liable to pay the product fee if at least 60% of the products are exported.
- For packaging materials (excluding materials that are part of the packaging of goods), the first domestic buyer may assume the product fee liability not only in the case of resale, but also in the case of own use.
- Taxpayers adding goods to stock may also assume the product fee liability from 1 January 2017.
For paper-based advertising materials, the rules on product fee payment will become more stringent: from 1 January 2017, paper-based advertising materials will also qualify as such if the customer makes no declaration to the print shop that makes the paper-based advertising material concerned.
The rules on individual waste management will be simplified. Previously, individual waste management included (among others) own waste collection from the end-customer; from 1 January 2017, the product fee-related rules will be much more lenient. From 1 January 2017, in the case of individual waste management, it will no longer be required by law to collect waste generated from products subject to the product fee from end-customers, nor will it be required for individual waste managers to collect such waste on their own.
The definition of “plastic shopping bag” will also change as of 1 January 2017. Flexible cooler bags previously classified as plastic shopping bags will no longer be included in this category from 1 January 2017. They will be reclassified under plastic packaging materials, which means that the applicable product fee will be significantly reduced, from HUF 1900 to HUF 57 per kg.
In accordance with the general objectives of the Product Fee Act (i.e., reducing pollution and environmental damage, saving natural resources, and promoting renewable energy sources), there will be additional cases from 1 January 2017 in which economic operators will not be required to pay the product fee. For example, this applies to cases in which the goods subject to the product fee that are to be released for circulation in Hungary, used for own purposes or added to stock are recycled from products that have become waste in Hungary.