BDO Indirect Tax News

A deposit system—a mechanism aimed at promoting recycling and the reuse of packaging—became effective in Poland on 1 October 2025. Under this system, a deposit is charged on certain types of beverage packaging (i.e., PET bottles up to three liters, metal cans up to one liter and reusable glass bottles up to 1.5 liters). Consumers pay the deposit when purchasing beverages and are refunded the amount when they return the empty packaging or packaging waste at designated collection points. The system covers all domestic transactions involving these beverage packages.

Key VAT Principles of the Deposit System

• Deposit excluded from the VAT base: The deposit amount collected when selling beverage packaging under the deposit system is excluded from the VAT taxable base at every stage of the supply chain—from the producer/importer through wholesalers and retailers to the consumer. This means the deposit does not increase the VAT base of the product price and no VAT is charged on the deposit itself upon collection.
• VAT on unreturned deposits: A VAT obligation arises only when the deposit is not refunded because the packaging or packaging waste was not returned. When packaging remains unreturned, the entity introducing the packaged products to the market must increase their VAT base by the value of the unreturned deposits and pay VAT on that amount at the same rate as the beverage product itself. Typically, this VAT settlement is performed annually by the deposit system operator acting as the VAT remitter, who collects data on refunded and unreturned deposits and settles VAT with the tax authorities by 31 January of the year following the reporting year.
• Separation of VAT roles in the deposit system: Under the new deposit system, there is a clear separation of the roles of the VAT taxpayer and the VAT payer (remitter), aimed at simplifying VAT administration and ensuring transparent tax settlements. The VAT taxpayer remains the entity that places the beverage products in deposit-system packaging on the Polish market. This typically includes producers and importers of beverages packaged in PET bottles, metal cans or reusable glass bottles covered by the deposit system. As taxpayers, these entities are responsible for reporting VAT related to their economic activities, which now includes the obligation to account for VAT on unreturned deposits in their VAT returns and records.

The role of the VAT payer, however, is assigned to a representative entity or operator of the deposit system. This operator acts as a VAT remitter and is responsible for the practical side of VAT settlement regarding the deposit system. The operator settles deposits with retail and wholesale units, as well as other collection points, ensuring proper accounting of refunded deposits. More importantly, the operator collects VAT on the value of the deposits that were not returned by consumers (i.e., the unclaimed deposits) and pays this VAT to the tax authorities.

The separation means that while producers and importers (VAT taxpayers) must include the value of unreturned deposits in their VAT base filing, they do not directly pay this VAT to the tax office. Instead, that responsibility lies with the operator (VAT payer), who makes the calculation and remits the VAT on unreturned deposits.

• Recordkeeping and reporting duties: Both the introducers of the products and the system operator must maintain detailed records of deposits collected, refunded and unreturned for at least five years to support the accuracy of VAT returns and settlements. The amount of unreturned deposits is documented to ensure proper VAT calculation and reporting.
• No VAT deduction on deposits: The Ministry of Finance has clarified that the deposit paid by consumers does not grant any right to deduct VAT by the entities charging the deposit. This rule is intended to prevent fraudulent practices where VAT could be reclaimed unjustly. VAT can only be accounted for on unreturned deposits, emphasising the neutral VAT treatment of deposits in the deposit system.

Challenges for Businesses

The deposit system introduces administrative challenges, including the need for precise deposit tracking, correct VAT base adjustments for unreturned deposits and coordination between producers, operators, retailers and tax authorities. Businesses must adapt their accounting systems and processes to comply with the deposit system's VAT rules and ensure transparent reporting to avoid penalties.

Marek Sporney
BDO in Poland