ESG – Environmental, Social and Governance

Deposit Refund Scheme: A Revolution for Now

Published on 22nd Aug 2023

The introduction of a cash deposit system in Poland is a huge financial and logistical challenge that awaits entrepreneurs in the coming years.

What will change? The cash deposit system is a way to collect used beverage packaging from the market. An additional fee (deposit) will be added to selected beverages at the checkout. The deposit will be refunded to the consumer when they return the used (empty) packaging to the store. The amount of the deposit paid by the consumer will be specified on each packaging. Consumers will be able to return used packaging throughout the country without showing a purchase receipt.

Payment card reader

The system is set to start operating from 2025.

Entrepreneurs will establish and organize the system themselves.

The system will be self-organized by companies, meaning entrepreneurs must create and finance the activities of the cash deposit system operator or operators. The operator will operate as a joint-stock company. To operate the system, they will need a special permit from the Minister of Climate.

Preparing the logistics of the cash deposit system is a lengthy, complex, and costly process. There is very little time left until its launch, which means entrepreneurs will need to act now, rapidly expand their expertise in this area, and secure adequate financial resources.

Financial, legal, and tax challenges for the beverage industry.

The new regulations will particularly affect the beverage industry, as the selective collection system will cover:

(i) reusable bottles up to 1.5 liters,

(ii) single-use plastic bottles up to 3 liters, along with their caps and closures,

(iii) metal cans up to 1 liter.

The beverage industry refers to those introducing packaged drinks to the market (both alcoholic and non-alcoholic), including producers and importers. They must decide whether to establish a cash deposit system operator themselves or join an operator created by other companies by signing an agreement.

Taxpayers will also need to:

  • Prepare for different settlement rules for reusable and single-use bottles.
  • Decide whether to maintain the previously used cash deposit system.
  • Prepare for the need to annually adjust the VAT settlement due to the balance of bottles issued and returned by the operator in a calendar year.

Furthermore, those introducing drinks in packaging to the market will also need to maintain a new type of record-keeping for VAT purposes.

It's also important to note that for certain types of packaging, previous return packaging rules will be retained, meaning different documentation and records will be required depending on the taxation nature.

Defining the tax implications of costs related not only to joining the operator but also the costs of fulfilling other legal obligations, such as labels, packaging, recyclable sourcing, new logistics for reusable bottles that will be returned to the manufacturer for refilling, is also crucial.

Logistical Revolution for Retailers and Consumers.

The second market segment facing significant logistical challenges is retailers and retail chains. While only retail spaces exceeding 200 m2 will be required to participate in the system, experiences from other countries show that smaller retailers will also want to collect empty packaging to maintain their attractiveness to consumers.

This means they must start planning the distribution of waste infrastructure now, considering building, spatial, occupational health and safety, sanitary, waste, and other regulations. They should check property titles and potential environmental requirements.

This logistical compliance is essential because it will provide store or retail chain management with the green light to operate within the cash deposit system from 2025 and to transparently engage with the operator. Securing interests in agreements, which will necessitate participation in the cash deposit system, will also be crucial.

This creates a whole set of issues related to accounting and taxation of financial flows between the store, consumer, and operator, with the store being a central element. Documentation, record-keeping, and tax settlement of these flows are new areas where thorough and early preparation will be vital to ensuring the tax security of retailers.

Agreements with operators will cover both those introducing packaged drinks to the market (agreement on joining the cash deposit system) and retail points of sale (agreements concerning deposit collection and packaging retrieval). Therefore, entrepreneurs should ensure they assess the legal and tax risks associated with the proposed methods of settlement and the arrangement of rights and obligations of the parties."


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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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