Currently legislative work on the bill has come to an end, the aim of which is to introduce a new tax on selected food products (“Sugar Tax“). The expected date of entry into force of this tax is 1st of January 2021.
The tax will apply to entities introducing beverages with the addition of sweeteners, caffeine or taurine to the domestic market – with some exceptions. Our analyzes indicate that this regulations may affect producers, distributors and retailers.
Sugar tax – challenges
Preparation for new regulations requires potential taxpayers to take a number of actions in order to identify new obligations, calculate and pay the tax and provide the authorities with the necessary information in the form required by law. A wide range of obligations will require cooperation between financial and accounting, logistics and IT teams. Taxpayers will face numerous challenges:
- Short deadline – according to the project assumptions, the tax will come into force on 1st of January 2021, which means that entrepreneurs have short time to prepare to meet the conditions stipulated in the regulations.
- Classification doubts – new regulations impose obligations on entrepreneurs placing specific products on the market, providing for a number of exemptions in this respect. In connection with the above, it is necessary to conduct a detailed analysis of the offered products in order to determine whether they fit into the catalog of products covered by the new obligations, which, due to the complexity of the classification analysis process, is a significant challenge.
- Contracts analysis – new regulations differentiate the scope of duties depending on the function the entity perform in the supply chain. Hence, to determine the scope of obligations it is necessary to identify individual supply chains and determine the position of individual participants, which requires an analysis of concluded contracts and commencing communication with suppliers and recipients.
- IT changes – with the entry of new regulations, entrepreneurs will be required to implement mechanisms to report a wide range of information (delivered products along with information about their composition, invoice numbers and batch numbers), which are usually not stored in financial and accounting systems. The need to adapt systems in such a short time can be a significant obstacle to meeting the imposed requirements.
- Sanctions – failure to comply with the statutory obligations may result in an additional fee of 50% of the amount of the tax due.
Proper preparation for new regulations requires the following steps:
- identifying the goods covered by the fee,
- conducting supply chain analysis,
- analyzing the catalog of data stored in IT systems in terms of meeting reporting requirements (identifying gaps),
- adaptation of IT systems to new requirements related to tax calculation and reporting
We can support you in classification, business and system analysis.
Please feel free to contact
Tomasz Kassel, Partner
+48 502 184 846
Krzysztof Wiński, Senior Manager
+48 519 506 434
Download the PDF version here