Why can an environmental product fee be a time bomb for importer companies?

Why can an environmental product fee be a time bomb for importer companies?

Why can an environmental product fee be a time bomb for importer companies? Unfortunately, the answer is in one sentence, because the legislation is almost irreducibly diverse and at the same time sets high penalty - default and product penalty fines. Now let's examine the most important regulations in a row, with Sztruhár Imre, the managing director of Green Tax Service Kft. The purpose of our present article is not to give an accurate presentation of the legal background, but to describe the most important rules, ringing the alarm bell for businesses that this tax needs to be addressed in depth. 

Anyone who imports anything directly from abroad is certainly affected by this legislation, regardless of what the product itself is, as it has a good chance of being packaged. We also immediately look at what defines as a subject to a product fee. By number, the legislation specifies 9 pieces, which are: batteries; packaging products; other petroleum products; electric appliances and electronic equipment; tire; commercial printing paper; other plastic products; other chemical products; the paper stationery. An important rule is that if a product has a component or accessory that is subject to a product fee and the obligation appears after that. The 'tax subject person' is therefore in most frequent rules: first domestic supplier, first user for own purposes or the person, who enter into inventories. It is clear from this that not only producers but also importers and purchasers from the European Community are affected by the obligation, as the importer is on the same footing as the producer. Understanding the main rules is not particularly difficult. The complexity is given, for example, by the fact that in a declaration the product has to be identified according to the so-called CsK or KT codes according to the legislation. Sometimes you don’t even need to do an in-depth analysis on a business because at first glance it seems that everything is not right. It is enough to just look at the submitted reports, analytics, codes and after some questions we already face the risk of a multiple fine……… We come across typical answers in our day-to-day work that “our accountant is very professional, he handles everything”, but let’s see what you see. Scratching the tip of the iceberg, it is immediately apparent that although the accountant is of course really professional, say in VAT, PIT, other taxes, but unfortunately not in product fees. But we do not work against them, but together with them, for the benefit of the client. 

But anyway, why would we expect an accountant to a master everything when it’s a separate profession??? We teach at OKJ training, the full name of the professional qualification is: Customs, excise and product fee administrator. Product charge administrators also learn waste management skills, unlike accountants, so that if the imported product contains electrical and electronic equipment, lights, batteries or accumulators, additional tasks arise, based on so-called sectoral legislation, defined in a separate government decrees. Accountants typically do not have knowledge of customs law either, although the obligation cannot be identify without the customs number of the items, and even if the supplier has the wrong ones, we are still responsible for the rules.

A further obstacle to the definition of the obligation is the fact that in many cases businesses have incorrect information. For example the environmental product charge has already been issued by the authority during the customs procedure. No, this is not true, since 2010 the product fee has NOT been issued during the customs procedure, it has to be independently reported. Although this stereotype regarding the community procurement is that „I have procured from an other EU-member state, someone else has already paid the product fee instead of me”. Well, that's not true either! Although there is an EU directive in the background, standards must be met at the nation state level. The obligor in Hungary is the entity that sells or uses the product for its own purpose as first domestic player. And let's just stop here for a moment….. if we import a product for own purpose from abroad, the obligation also applies in this case. Am I obliged if I import a manufacturing machine or an assembly line for myself from abroad? The answer is again yes. 

The end result of the legislative intention is to create an obligation after the items that are likely to become waste in Hungary, to create a financial source in order to operate an efficient collection and recovery system. The aim would be for the products not to end up in the landfill or incinerator, but to return to the production cycle as many times as possible as a second raw material in the cycle economy. 

This type of tax (fee) can be checked by the National Tax and Customs Authority within the limitation period, which according to the general rules is 5 years. The tax fine based on the deficit can be maximum 100%, and the default fine can be up to HUF 500,000. The latter may be imposed on defaulting undertakings under several headings. 

Based on all this, it seems that in order to avoid high penalties (in the end, to protect our environment), it is still worthwhile to use a professional company, to deal in depth with compliance with the law. (more information on the topic: available at www.ktdt.hu)  

Declaration

The Green Tax Service Ltd. hereby declares that the person compiling this professional information material performed the task to the best of his knowledge, trying to compile the deepest analysis based on the information, and acted with the expected care and caution.

This summary does not contain the regulations provided for in the Complete Product Fees Act and its implementing decree, only its most significant points. Its purpose is not to cite the references to completeness and legal norm in detail, but to provide practical guidance, the primary purpose of which is clarity.

The findings, opinions and suggestions described in the professional material reflect the legal interpretation and professional opinion of the author and qualify as a recommendation and not an exclusive method. The statement of Green Tax Service Ltd. contains the professional opinions, suggestions and methods provided by the provisions of the Product Fees Act and the applied market practice to the maximum.

Green Tax Service Ltd. excludes its liability for possible errors and omissions. GREEN TAX SERVICE Kft. has no competence to interpret the legislation, it does not bind the courts or authorities in a possible legal dispute.