The Sugar Sweetened Drinks Tax – are you impacted?

If you are a wholesaler, retailer, importer, producer or distributor of sugar sweetened drinks, then you are likely to be impacted by the Sugar Sweetened Drinks Tax (“SSDT”). As the proposed effective date for the introduction of the SSDT is fast approaching, our below guide will answer the main questions that you have in relation to this new tax.

What is a sugar sweetened drink?

A sugar sweetened drink is defined as meaning:

1. A pre-packed, ready to consume beverage, containing added sugar
2. A pre-packed, concentrated substance in liquid or solid form, containing added sugar, which requires preparation before consumption by the final consumer
3. Beverages prepared from concentrated substances in liquid or solid form which are ready to consume

The question as to whether a product is liable to the tax is determined by reference to EU customs tariff classification codes. The tax will apply to a sugar sweetened drink with a sugar content of 5g or more per 100 millilitres at the time it is first supplied in the State by a supplier, i.e. a taxable person or an accountable person for the purposes of the Value-Added Tax Consolidation Act, 2010. 

In recognition of the potential impact of the tax on the beverage industry, the tax will be based on the sugar content as set out on the food information on the label or package for the drink concerned as follows:

• €0.2439 per litre for drinks with a sugar content of 8g or more per 100ml; and
• €0.1626 per litre for drinks with a sugar content of greater than 5g but less than 8g per 100ml.

What is not with the remit of the SSDT?

The tax does not apply to food supplements, products produced by small producers with maximum annual production of 13,000 litres and the supply of products directly to final consumers or to local establishments (not more than 100km from the place of manufacture) supplying directly to the final customer.

Other exclusions include:

• the supply of sugar sweetened drinks between related companies;
• the supply or self-supply of a beverage prepared from a pre-packed concentrated sugar sweetened drink for private use; and
• the supply of beverage prepared from a pre-packed concentrated sugar sweetened drink which has already been supplied in the State.

Are any reliefs available?

Full relief from the tax will be granted to registered exporters who can prove to the satisfaction of the Irish Revenue (“Revenue”) that a product subject to the tax in the State has been exported outside of the State.  A refund of tax paid will be granted where a supplier is in a position to demonstrate to the satisfaction of Revenue that the product on which the tax has been paid has been returned to the liable supplier.

A claim for repayment must be submitted to Revenue within a period of not less than one month and not more than six calendar months after the end of the accounting period in which the supply was made.

SSDT applies to me - what should I do next?

Suppliers and exporters are required to register for SSDT with Revenue and are required to lodge a return showing the quantity of sugar sweetened drinks supplied in an accounting period, i.e. a period of two calendar months, and pay the tax due in respect of that accounting period, within one month after the end of the accounting period to which the return relates. Records must be maintained and produced for inspection to a Revenue officer upon request. Any individual or entity that fails to comply with the provisions in relation to the tax shall be liable on summary conviction to a fine not exceeding €5,000.