Tax Alert

On 2 June 2023, the Hungarian Official Gazette (No 81) published the rates of the Extended Producer Responsibility Scheme (EPR).

As of 1 July, the EPR scheme’s rules will apply in Hungary. This means that producers or first domestic distributors will have to assume the financial responsibility for the costs of collection and disposal of specific types of waste generated by their products under the new scheme.

EPR rates are significantly higher than Green Tax rates. For example, under Green Tax rules, the price for paper and cardboard was HUF 19 per kilogram; under the EPR scheme it is HUF 173. The EPR rate for screens and monitors will now be HUF 362 instead of HUF 57. However, there are certain product streams where the increase will be smaller. Large machinery, for example, will rise from the Green Tax’s HUF 57 to only 124 HUF in the EPR scheme.

Please note that the introduction of the EPR does not mean the abolition of Green Tax obligations. The EPR largely covers the flow of products covered by the Green Tax, and for the time being both obligations will remain in parallel. However, it’s possible that Green Tax payments may be almost completely abolished, as the legislator has decided to deduct the EPR fee from the Green Tax tariff for identical product flows in order to avoid double payment.

Companies who have registered on the corporate partner portal of MOL Waste Management Ltd (MOHU) and submitted their registration request to the National Waste Management Authority through the OKIR portal, should:

• Categorize their products by commodity code, taking into account the sectoral legislation and their packaging waste by raw material according to the EPR Regulation
• Establish a circular code and keep a register with the data content specified in the EPR Regulation
• Establish a process to quantify the quantity of circular products
• Prepare their billing software to apply the invoice clause as defined in the EPR Regulation and record MOHU as a 'supplier' in their systems
• Review their Green Tax-related processes for the purpose of allocating the fees payable after 1 July

Thereafter, EPR data must be submitted quarterly to the national waste management authority by the 20th day of the month following the quarter in question, using the form published by the authority.

The established fee is payable quarterly within 15 days of receipt of the invoice issued by MOHU, and the first invoice should be paid in the month following the third calendar quarter. MOHU receives the data from the waste management authority.

Our consultants at KPMG are happy to discuss the new system, as well as the challenges of its application and implementation. Should you have any questions or comments, please do not hesitate to contact us.