Sugar tax stands for the payment on beverages with the addition of substances with sweetening purposes, caffeine or taurine. In Poland, the sugar fee was introduced under the act of 14 February 2020 and has been in effect since 1 January 2021.
The amount of the sugar fee depends on the content of sugar or other sweetening substances in the product.
The purpose of introduction of the sugar tax was to reduce the consumption of sugar; higher prices are supposed to discourage consumers from purchasing and encourage producers to use lower amounts of sugar.
Sugar tax on beverages
In case of introduction of products to the domestic market, the sugar fee applies to beverages with the addition of:
- sugars that are monosaccharides or disaccharides and foodstuffs containing those substances and sweetening substances,
- sweetening substances listed in the Regulation of the European Parliament and the Council (EC) no. 1333/2008 (for instance: xylitol, sorbitol, aspartame),
- caffeine or taurine.
What are beverages?
A beverage can be a product other than juice or nectar.
- Juice is made from the edible parts of healthy and ripe raw materials. It is an alternative for fruit and vegetables. The composition of juice is similar to the composition of vegetables and fruit such juice is made from. According to the applicable law, adding sugar, sweetening substances, dyes and preservatives to fruit juice is forbidden.
- Nectars are products made from juice diluted with water, with or without the addition of sugar or honey. The minimum content of juice in nectar is strictly specified in regulations of law and depends on the fruit used in the production of the final product.
In case of beverages, the content of raw material (e.g. fruit) may be negligible or none at all. Water, sugar, flavoring and dye are the standard base of many beverages, but not for all of them. There are also beverages with content similar to juice or nectar e.g., when preservative substances are added to juice, the juice shall be considered as a beverage.
Beverages are products that have been specified in the Polish Classification of Products and Services in class 10.32 i.e., juice made from fruit and vegetables, class 10.89 other foodstuffs not elsewhere specified and in section 11 of the Classification – beverages.
The composition of beverages is to include at least one of the substances listed in the act, namely: sugar, sweetening substances, caffeine, taurine (e.g. this includes carbonated and non-carbonated beverages, nectars, juice, energy drinks, isotonic drinks, flavored water) – excluding substances which are naturally present in them. A naturally present substance is understood as a substance that has not been added to the product.
Exclusions regarding beverages
The sugar fee will not apply to placing on the market of beverages which are:
- medical devices pursuant to Art. 2 section 1 point 38 of the act of 20 May 2010 on medical devices;
- dietary supplements pursuant to Art. 3 section 3 point 39 of the act of 25 August 2006 on food and nutrition safety;
- food for special medical purposes, infant formulae, follow-on formulae;
- excise goods i.e., alcoholic beverages;
- beverages in which the mass fraction of fruit, vegetable or fruit and vegetable juice constitutes at least 20% of the raw material composition and the content of sugars is lower than or equal to 5 g per 100 ml of the beverage (i.e. beverages that meet both conditions at the same time – content of juice and sugars);
- carbohydrate-electrolyte solutions (commonly known as isotonic drinks) in which the content of sugars is lower than or equal to 5 g per 100 ml of the beverage;
- products in which milk or its products are first in the list of ingredients, regardless of their classification in the Polish Classification of Goods and Services (milk, yogurts, buttermilk, kefir, curdled milk, etc.).
Who will need to pay the sugar tax?
The obligation to pay the sugar fee is imposed on natural persons, legal persons and organizational units without legal personality that are:
- entities selling beverages to retail stores,
- entities carrying out retail sales of beverages in case of producers, entities purchasing beverages as part of intra-community supply of goods or beverage importers,
- ordering parties, in a situation when the contents of the beverage covered by the fee constitute an element of an agreement concluded by the producer and regarding the production of the said beverage for the ordering party (the payment obligation is imposed on the ordering party).
If you place on the market beverages for which the fee has already been paid, you do not need to list such beverages in the information and pay the fee for them.
Note! If you sell beverages subject to the said fee to a contractor who, at the same time, carries out retail and wholesale, you are obligated to deduct the fee from all the beverages sold to that contractor.
- Sugar tax is technically not a tax since 96% of it is supposed to go to the National Health Fund and only 3.5% will go to the state budget. The government cares for the health of Poles.
The amount of sugar fee
The amount of the fee depends on two values:
- FIXED FEE of PLN 0.50 for the content of sugar in the amount equal to or lower than 5 g per 100 ml of the beverage or for containing any amount of at least one sweetening substance,
- VARIABLE FEE of PLN 0.05 per every gram of sugars over 5 g per 100 ml of the beverage – expressed per liter of beverage.
An additional fee will be added to beverages containing caffeine or taurine; the said fee will amount PLN 0.10 expressed per liter of beverage.
In a situation when the beverage contains several substances in total e.g., sugar, a sweetening substance and taurine – the fees shall be summed up but their maximum value will be PLN 1.20 expressed per liter of beverage.
For calculation purposes, the content of sugars in 100 ml of the beverage is rounded up to a full gram.
Lowered sugar fee
The lower fee applies to beverages containing over 5g of sugars in 100 ml:
- when the mass fraction of fruit, vegetable or fruit and vegetable juice constitutes at least 20% of the raw material composition, or
- they constitute isotonic drinks – containing over 5 g of sugars in 100 ml of beverage.
The fee in case of those products will be only PLN 0.05 for every gram of sugar over 5g in 100 ml of beverage. In other words, those beverages will only be subject to the variable portion of the fee.
The payment obligation of the fee arises on the date on which the beverage is placed on the market. It should be understood as sales of beverages by the entity subject to the payment obligation i.e., the first point of sale that carries out the retail sales.
The deadline to pay the fee expires on the 25th day of the month following the month that the fee refers to.
The fee must be paid to the relevant bank account of the head of the tax office. The jurisdiction is determined on the basis of the address of residence or address of the registered office of the entity obligated to pay the sugar fee.
In case of a delayed payment of the fee – the head of the tax office may, by way of a decision, impose an additional charge in the amount of the 50% of the payable fee.
The declaration is submitted through form CUK-1
The information should include:
- the period for which the declaration is being submitted,
- place of submission of information – the name of the competent tax office,
- purpose of submission of the information: a) submission of information, b) correction of information,
- details on the entity obligated to pay the fee: a) name (company name) or first name and surname, b) Tax ID number, c) name and surname, phone number or e-mail address of the contact person,
- properly determined amount of the fee,
- amount of the payable fee,
- information on the fee:
- the total amount of the fee,
- the amount of the fee for individual beverages,
- number of liters of beverages sold in a particular period – by individual beverages along with information on the addition of caffeine, taurine or sweetening substances and on the content of sugars in 100 ml of beverage.
- numbers of invoices and their issue dates, respectively the Tax ID number of the supplier or the purchaser and the goods batch numbers, if they are not specified in the invoice,
- date and signature of the entity obligated to pay the fee or date and signature of the person authorized by them,
- the instruction that the information constitutes the grounds to issue the enforcement order.
Author: Bożena Wodarska, Accounting Department Manager at MDDP Outsourcing.
Act of 11 September 2015 on public health