Deposit Return Scheme: No VAT on deposit for retailers
"Under VAT law, the deposit amount will be regarded as nil when the drink product is moving through the supply chain," Revenue states
Print2 February 2024
Under the Deposit Return Scheme (DRS) which launched on 1 February, retailers selling in scope bottles and cans do not have to account for VAT on the deposit, retailers’ organisation RGDATA confirmed in a news update earlier this week.
Revenue has confirmed the position regarding VAT on the deposit fee charged, in the following statement.
“The deposit is charged at each stage of the supply chain when the drink product is supplied,” Revenue stated. “There is no Value-Added Tax (VAT) on the deposit when the drink product is supplied. Businesses in a supply chain supplying Deposit Return Scheme products will not have to account for VAT on the deposit they charge.
“An example of such businesses are producers, wholesalers, retailers.
“Under VAT law, the deposit amount will be regarded as nil when the drink product is moving through the supply chain. A VAT liability will arise on the deposits when empty plastic bottles or cans are not returned. In this case, the operator of the scheme will be the person who is liable for the VAT due,” Revenue confirmed.
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