Changes in legislation concerning the environmental charge

This year, the Customs Authority has taken over tasks related to the environmental charge from APEH. As László Deák, one of the directors of PricewaterhouseCoopers has told us, this will allow stricter inspections to be carried out. Another new measure introduced in January requires companies obliged to pay environmental charge to register with the Customs Authority, within 15 days of commencing the activities subject to this obligation. VPOP has also announced, that in the future they will not only use administrative methods to check whether companies fulfil their obligations, but other methods will be employed as well. Apart from monitoring compliance with payment obligations, VPOP will also carry out on the spot inspections everywhere in the whole process of waste collection, selection, and recycling to make sure that only those companies are exempted from this payment obligation which fulfil the criteria defined therefor. Sanctions have also become tougher. Companies which fail to comply with regulations, will be subject to more substantial fines than in the past. According to PricewaterhouseCoopers, the provisions of relevant legislation are often difficult to interpret properly, while it is also difficult to comply with the complicated regulations. At the same time, the changes in regulations have left some problems unsolved, which continue to exist, in spite of the much stricter system. One of the problematic areas is packaging under contract. It is unclear, who should be subject to the environmental charge: the client ,or the contractor actually performing the packaging tasks. According to the Customs Authority and the Ministry of Environmental Policy, all entities involved in actual packaging should be subject to the charge. Consultants, including PWC do not share this approach, as the law says that those entities shall be subject to payment which sell the product or utilise it for their own purposes. Contractors performing packaging tasks should not be subject to the charge, since they are not selling a product, but performing a service. FMCG companies are effected by this problem, as an increasing number use subcontractors to perform packaging tasks. Another problem for the FMCG sector is that multinationals do not pursue their trading activities in Hungary through subsidiaries – regardless whether they have one, or not – but simply get a VAT reference number from APEH for this purpose. The question is again: who shall be obliged to pay? According to the competent Hungarian ministries, VAT registration in itself serves as grounds for this obligation, while other parties disagree. Reusable packaging materials like crates and palettes also create a problem, because of the complicated administration involved in monitoring their use.