Sugar tax - when is it applicable and who has to pay it?

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Originally, the sugar tax was to be introduced in July 2020. However, this date was postponed to January 1, 2021. The sugar tax aims to reduce the demand for unhealthy food by increasing the price of these products. It should also influence producers and contribute to lowering the sugar, caffeine and taurine content. When is there an obligation to pay sugar tax and what are the penalties for failure to comply with it? The article will present the most important information related to the sugar tax.

Sugar tax - what is it?

The sugar levy (sugar tax) is a new form of levy that was introduced from January 2021. The provisions on the sugar tax are introduced by Art. 7 of the Act amending certain acts in connection with the promotion of health-promoting choices of consumers. The levy is intended to affect both consumers and producers of unhealthy food. Consumers should start opting for healthier products, and manufacturers should start choosing to reduce the amount of sweeteners in their products. These changes should reduce the overweight and obese population. The sugar levy is not explicitly called "tax", but it must be paid to the tax office.

The sugar tax applies to beverages with the addition of:

  • sugars (monosaccharides, disaccharides, foodstuffs containing these substances);

  • sweeteners as referred to in Regulation (EC) No 1333/2008 of the European Parliament and of the Council (for example xylitol, sorbitol, aspartame);

  • caffeine or taurine.

The regulations also list which drinks are not subject to the sugar tax. The fee does not include beverages that:

  • are medical devices;

  • are dietary supplements;

  • are food for special purposes, infant formula and follow-on formula;

  • excise goods;

  • contain more than 20% of fruit, vegetable or fruit and vegetable juice, and the sugar content is less than or equal to 5 g per 100 ml of drink;

  • are carbohydrate-electrolyte solutions, the sugar content of which is less than or equal to 5 g per 100 ml of drink;

  • are products based on milk or milk products (yoghurts, buttermilk, kefir, curdled milk, etc.).

Sugar tax - who is applicable?

Pursuant to Art. 12d. section 1 of the Public Health Act, the obligation to pay the sugar tax applies to a natural person, legal person and organizational unit without legal personality, which:

  • sells beverages to retail outlets;

  • produces, purchases and retailing beverages from other EU or non-EU countries;

  • orders from the manufacturer to produce the drink subject to fee, and the composition of the drink subject to fee is part of the contract - the customer is responsible for payment.

When the trader sells or markets drinks for which the fee has been paid in advance, he is not required to include these drinks in the information or to pay sugar tax on them.

Example 1.
Mr. Jacek runs a small local shop. He orders and then sells sugar-taxed products. Is he obliged to pay the sugar tax?

No, Mr. Jacek is not obliged to pay the sugar tax. The producer was obligated to pay it. It should be noted that when an entrepreneur sells drinks subject to sugar tax to a contractor conducting both retail and wholesale sales, he is obliged to pay a fee on all drinks that he has sold to him.

Sugar tax - how to inform the tax office?

A producer who has concluded a contract with the ordering party for the production of a drink subject to sugar tax is obliged to inform the head of the tax office having jurisdiction over the place of residence or the seat of the ordering party about this fact at the latest on the day when the obligation to pay the sugar fee arises.

The law specifies what must be in this information. Namely, they should be included there:

  • data of the producer and the entity obliged to pay the fee (company name or name and surname, registered office or place of residence, tax identification number, name and surname, telephone number or e-mail address of the contact person);

  • information on the composition of the beverages covered by the contract, including the addition of caffeine or taurine, sweeteners and the sugar content per volume of beverages to the extent that the fee can be calculated;

  • date and signature of the manufacturer or a person authorized by him.

The producer is also obliged to provide identical information to the ordering party, who is obliged to pay the sugar tax. This information should be provided by the manufacturer within the time limit on which the contracting authority will be able to pay the fee in due time.

Sugar tax - how much is it?

The issues related to the amount of the sugar levy are regulated in Art. 12f of the Public Health Act. The sugar tax is calculated as the sum of two values: constant and variable.

For each liter of drink, the sugar fee is:

  • PLN 0.50 fixed fee - for the content of sugars in an amount equal to or less than 5 g in 100 ml of drink or for the content of at least one sweetener in any amount;

  • PLN 0.05 of variable fee - for each gram of sugar over 5 g in 100 ml of drink.

There is a different amount of sugar tax depending on the content of sugars and food additives in 100 ml of the product.

Higher tax applies to beverages containing caffeine or taurine: additional PLN 0.10 per liter of drink. The highest amount of the fee may not exceed PLN 1.2 per liter of drink.

The lower sugar tax applies to beverages containing more than 5 g of sugar in 100 ml:

  • in which the mass fraction of fruit, vegetable or fruit and vegetable juice is not less than 20% of the raw material composition;

  • which are carbohydrate-electrolyte solutions (e.g. isotonic drinks).

Only the variable part of the sugar tax was imposed on these drinks, amounting to PLN 0.05 for each gram of sugar over 5 g in 100 ml of drink. There is no fixed fee. When calculating the sugar tax, the sugar content in 100 ml of a drink should be rounded up to the full gram.

Example 2.

The sugar content in 100 ml of the drink is 12.4 g. A fixed fee of PLN 0.50 is charged for the sugar content in the amount of 5 g in 100 ml of the drink. For the content of sugars above 5 g, i.e. 7.4 g, the variable fee is PLN 0.40 (8 * PLN 0.05). Therefore, the fee per liter of drink is PLN 0.90.

Example 3.

The sugar content in 100 ml of a drink with 25% fruit juice is 7 g. No fixed fee is charged for the sugar content of 5 g in 100 ml of drink (due to the 25% fruit juice content). In this case, only the variable fee of PLN 0.10 (2 * PLN 0.05) is charged. The fee per liter of drink is therefore PLN 0.10.

Example 4.

The sugar content in 100 ml of a drink containing taurine is 3 g. A fixed fee of PLN 0.50 is charged for the content of sugars in the amount below 5 g in 100 ml of drink. The drink contains taurine, therefore a fee of PLN 0.10 per liter of drink is added. Therefore, the fee per liter of drink is PLN 0.60.

Example 5.

The drink contains caffeine and one sweetener. A fixed fee of PLN 0.50 is charged for the sweetener content in 100 ml of drink. The drink contains caffeine, therefore a fee of PLN 0.10 per liter of drink is added. Therefore, the fee per liter of drink is PLN 0.60.

Example 6.

The sugar content in 100 ml of a drink containing caffeine is 20.7 g. A fixed fee of PLN 0.50 is charged for the sugar content in an amount equal to 5 g in 100 ml of drink. For the content of sugars above 5 g, i.e. 16 g, the variable fee is PLN 0.80 (16 * PLN 0.05). The drink contains caffeine, therefore a fee of PLN 0.10 per liter of drink is added. Therefore, the fee per liter of drink would be PLN 1.40. The maximum amount of the fee may not exceed PLN 1.20 per liter of drink. Therefore, the fee per liter of drink is PLN 1.20.

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Sugar tax - by when and to what bill should I pay?

The entrepreneur is obliged to pay the sugar tax by paying the appropriate amount to the account of the head of the tax office competent for the place of residence or the seat of the company. In addition, he is obliged to submit information on the amount of the sugar levy (CUK declaration) via the IT system of the minister of finance.

The CUK declaration has been published in the Central Repository of Specimen Electronic Documents. It will be possible to submit it using the "JPK Client" application made available by the Ministry of Finance, and signing only with a qualified signature. It will not be possible to sign it with a trusted signature or authorization data. For this reason, it will not be possible to submit the declaration via other electronic channels, such as the e-Deklaracje gateway. The sugar tax has to be paid and the information submitted by the 25th day of the month following the month for which the information is related.

The information on the sugar tax should include:

  • period for which it is submitted;

  • place for submitting information - name of the competent tax office;

  • purpose of submitting information: a) submitting information, b) correcting information;

  • data of the entity obliged to pay the fee: a) name (company) or name and surname, b) tax identification number, c) name and surname, telephone number or e-mail address of the contact person;

  • properly determined amount of the fee;

  • the amount of the fee to be paid;

  • information about the fee: a) the total amount of the fee, b) the amount of the fee for individual beverages, c) the number of liters of beverages sold in a given period - broken down into individual beverages with information about the addition of caffeine or taurine or sweeteners and the content of sugars in 100 ml of the drink, d) invoice numbers, dates of issue, NIP (tax identification number) of the supplier or buyer, and batch numbers, if not included in the invoice;

  • date and signature of the entity obliged to pay the fee or a person authorized by him;

  • instruction that the information constitutes the basis for issuing the writ of execution.

If the taxpayer fails to pay the sugar tax within the prescribed period, the tax authority will impose an additional fee of 50% of the amount due.