Hungarian legislation imposes a special tax on certain product categories that have or may have an impact on the environment, such as, inter alia, batteries, electric and electronic equipment, certain chemical products and packaging. This tax is called the “environmental product fee”. This legislation (Act LXXXV of 2011 on the environmental product fee – the “Environmental Product Fee Act”) has been amended as of January 1, 2016. For foreign businesses, the most important change is most likely the extension of the environmental product fee-related obligations to non-Hungarian companies making distant sales to Hungarian customers.
By a simple technical adjustment to the definition of ‘placing [the relevant products] on the market’, the non-Hungarian companies selling online to Hungarian customers (by “distant selling”) are now obliged to pay an environmental product fee for all the products that are sold to Hungary and fall within the scope of the Environmental Product Fee Act. Given that packaging materials are also subject to the environmental product fee, practically all sales trigger some payment obligations, but other products that are listed in the Environmental Product Fee Act can also result in product fee-payments (for example, batteries, chemical products, electronic and electric devices, etc.). The amount relating to the environmental product fee for each type of product is defined in the Act, with separate rates applying to the various types of packaging materials. The Environmental Product Fee Act enables companies to opt for a flat rate, in which case they can perform their obligations on an annual basis, provided that they do not exceed the relevant statutory thresholds.
The Environmental Product Fee Act not only imposes a payment obligation, but also subjects companies to other types of obligations as well. Firstly, within 15 days of starting their activities (in the case of non-Hungarian companies, this is most likely the first sale to Hungary), the companies concerned must register themselves at the National Tax and Customs Administration of Hungary (NTCA). Companies that fail to register themselves within the above deadline lose the right to opt for the flat rate product fee. Producers not registering or not qualifying for the flat rate must report and pay on a quarterly basis.