The changes to the Environmental Product Charge and the Extended Producer Responsibility (EPR) government regulation have raised a number of operational issues

The changes to the Environmental Product Charge and the Extended Producer Responsibility (EPR) government regulation have raised a number of operational issues

As we reported earlier at the end of last year, the legislative tsunami affected several pieces of waste management legislation, including the product charge and the Extended Producer Regulation (EPR). We have received numerous questions in response to the recent briefings, which we have now collated and are providing in a structured format.

Legislative changes primarily generate questions related to the environmental product charge and are most relevant to the packaging industry. By their nature, the questions are not related to legislative knowledge but to operational tasks and typically require reflection and confirmation from market actors.

Now let’s look at the most frequently asked questions about the product charge, extended producer responsibility fee and penalty regulation and our answers to them.

1. Issues related to the environmental product charge

1.1 Will the product charge obligation for product flows covered by the EPR really be abolished from 1st January 2025?

Yes, the legislation has been adopted and is in force, so the obligation ceases for: batteries, electrical and electronic equipment, packaging, tyres, promotional paper, office stationary paper.

1.2. What needs to be changed in the current reporting for the fourth quarter of 2024?

Nothing, because the amendment is effective from 1st January 2025, so the last quarterly return must be filed in the „normal way” as before.

1.3 Will the obligation to pay the product charge also cease if our company, for whatever reason, paid a product charge instead of an EPR on the product streams that are now being phased out?

Yes, total product flows have been exported. Thus, packaging for which the obligation to pay the product charge existed because the EPR payment was not made, such as packaging imported from abroad or acquired by way of take-over, which for certain reasons became scrap or waste, is not subject to the payment of an environmental product charge.

The other typical case is in the case of electrical and electronic equipment, where the manufactured or imported electronics are covered by the costums tariff number but are not covered by Government Decree 197/2014. These are typically specific electronic devices that either do not have a separate function, are not equipment, or are designed and intended to be incorporated into a specific device not covered by the Government Electronics Regulation. Within or in addition to this, the most common case is that of imports of manufacturing equipment directly from abroad, and within this equipment there are also special electrical components and accessories which cannot be used elsewhere.

Last but not least, we should not forget those packaging products that were not defined as exempt under the previous legislation (packaging products that never become packaging due to their nature) and for which the obligation to pay the product charge remained. One of the most common examples of this category is the garbage bag, the garbage bag, where the 57 HUF/kg fee obligation existed until 31st December, no longer applies.

With these changes, the product charge payment obligation will be significantly reduced, bypassing central budget revenues, while on the other hand shifting the focus to the EPR payment obligation, anticipating in-depth controls.

1.4 Is there anything to be done about the takeover contracts that have been terminated by the change in legislation?
The National Tax and Customs Administration will close the notified take-over contracts ex officio on 31st December 2024, so there is no obligation to notify cancellation.

1.5. How do the changes affect the obligation to indicate the invoice?

Since the overtakings have ceased to apply to packaging products, the assumption – „the product charge obligation is governed by the Ktdt. 14 (5), paragraph … ), sub-paragraph … ) of the invoice” („a termékdíj-kötelezettség a Ktdt. 14. § (5) bekezdés … ) pontja … ) alpontja alapján a vevőt terheli”). The same applies to the declarations where the words: ‘the product charge for the packaging product(s) is (are) not paid on the basis of the declaration of the purchaser for the period registered under No …’ („a(z) csomagolószer termékdíja a vevő … számon iktatott időszakra vonatkozó nyilatkozata alapján nem kerül megfizetésre”) are also no longer necessary. In the case of invoices issued after 1st January 2025, if the clause appears on the invoice, it is recommended to amend it by means of a single document which is considered as one invoice. It should also be noted that, even if the clauses remain on the invoice, there is no immediate risk of a fine being imposed, although it is not very professional to refer to a legal provision that no longer exists.

The same applies to the CsK codes. Except in the case of a claim by a customer entitled to a refund, this was not the case in the past. The deduction from the invoices requires an operational decision, taking into account the manpower needed. Just as the retention of the clause is not a direct risk of penalty, neither is its inclusion, although it is still recommended that it be removed from invoices, again on grounds of professionalism.

1.6. For whom and for what will the obligation to notify apply after 1st January?

The State Tax Authority will also close the liability registered after 1st January 2025 for products no longer subject to the product charge ex officio on 31st December 2024. If the company had an obligation in respect of other petroleum products, other plastic products or other chemical products in the past, there is also no obligation to notify a change.

However, in the case of carrier bags, which were previously packaging products but have now been transferred to the other plastic products stream, there is a 15-day notification obligation. Routine consultancy firms will carry out this notification without question, as the previous declaration will show whether or not the company is obliged to notify as a producer or importer of carrier bags.

1.7. The product charge and EPR for carrier bags must be paid to the obligor, is it not possible to take over the charge?

The issue is primarily commercial and not professional, but based on market practice, yes, this is extended to the original obligor. It is to be noted that the formerly packaging trader (Ktdt. 14 § (5) d))) will no longer have the possibility to take over under this title. Of course, it should be stressed that the obligation for the previously still in stock, for the carrier bags acquired under the take-over obligation, has to be settled, but now in the product stream of other plastic products. The legal instrument of assumption of liability is retained in the case of export deliveries of at least 60% of the goods abroad (Ktdt. 14 § (5) aa)), however, the carryer bags are typically and by their nature not purchased for export.

1.8 Will the KT codes change from 1st January?

Plastic carrier bags must be identified by KT codes, if the account has previously been marked with the CsK codes, they must be replaced by KT codes. Although not a legal prescription, it should be treated uniformly and consistently, other rules are described above. In addition, the identification and the obligation to pay the charge for the component part or accessory of a motor vehicle subject to the product charge has also changed.

2. Issues related to the Extended Producer Responsibility (EPR) Regulation

2.1 Have the obligations to declare the EPR on the invoice changed

No, they have not changed, the obligation to endorse the invoice remains unchanged for the obligor, the declarant (60% export, use as raw material for frying oil, frying fat) or in case of customer demand (typically for packaging – packaging designed and intended to be filled at the point of sale). Alternatively, where the EPR obligation is invoiced to the customer, it is still not prohibited and is recommended.

2.2. Is it possible to make a declaration when using blended oil as feedstock?

Yes, in the category of frying oil and fats of heading 1517 90 91 HS and CN subheading 1517 90 91: mixtures of circular products according to 1.9.1 – 1.9.5 became compulsory products from 1st January, but the rules are the same as for the previous product stream.

2.3. Have the KF codes changed since 1st January?

Yes, they have been changed at a minimum level, they have been clarified: the so-called group code for the 5-6 characters of the KF code has been extended and the table of the origin code for the 8th character of the KF code has been clarified.

2.4. Has the notification obligation for reusable, reusable packaging been abolished?

Yes, the obligation to register in the UHCS catalogue has been removed from the condition of non-payment of the EPR fee for reusable packaging. For UHCS packaging that is newly introduced into the system, the obligation to pay EPR is created anyway for the first placing on the market, and the obligation to report it is created after repeated multiple rotations.

Please note that in this summary, we present the most common questions about the amendment and our answers to them.

We hope that this technical summary has helped you understand the issues involved.  Green Tax Service Ltd. is at your disposal at the usual contact details.

Statement

GREEN TAX SERVICE Ltd. declares that it has compiled this information in accordance with the requirements of the legislation on product charges and the extended producer responsibility scheme. It has acted with due care and diligence and in accordance with professional standards.

This summary does not include the full product fee law and its implementing regulation, or the extended producer responsibility government regulation. It is not intended to be exhaustive and does not contain exact citations of the legal norms, but rather provides practical guidance, the primary purpose of which is to make the summary understandable.

GREEN TAX SERVICE Ltd. informs the reader that the findings, opinions and proposals described in this summary reflect the interpretation, practice and professional opinion of the legal practitioners, which are considered professional opinions, recommendations and guidelines, but the contents of this summary are not legally binding. GREEN TAX SERVICE Ltd. disclaims any liability for any errors or omissions.

GREEN TAX SERVICE Ltd. has no competence to interpret the legislation, the information contained in this summary is a professional opinion, which is not binding on the courts or authorities in the event of a dispute.