- Catalonia’s tax on packaged sugary drinks applies from 1 May, after a one-month delay.
- It covers drinks with added caloric sweeteners and leaves out, among others, dairy and alcoholic drinks and medical products.
- Anyone who makes, imports or sells these drinks must review their obligations, prices and invoices.
On 1 May 2017 the tax on packaged sugary drinks, created by Law 5/2017 of 28 March, came into force in Catalonia. It was due to apply on 1 April, but Decree-law 2/2017 of 4 April postponed it by a month. Parliament validated that decree at its plenary session on 26 April, and the corresponding resolution was published in the Official Gazette on 4 May.
It is an extra-fiscal tax, that is, aimed at discouraging a type of consumption, justified by the effects of sugar on the population’s health and backed by World Health Organization recommendations. It is compatible with VAT: it neither replaces nor reduces it, but is added to it. For food and catering companies it means a new obligation, with its own rules. Its stated aim is to discourage the consumption of added sugars, as well as to raise revenue.
Which drinks and who pays
The tax applies to the supply of packaged drinks with added caloric sweeteners. The rule includes, among others, soft drinks and sodas, sports drinks, tea and coffee drinks and energy drinks, and nectars and juices with added sugars. Dairy drinks, drinkable yogurts, alcoholic drinks and medical products, among others, are left out.
The law identifies the person who supplies the drink to the final consumer as the obliged party, and sets out the rules for complying with the tax, which falls to be filed and paid by those involved in the chain according to their position in it. Each company therefore has to determine where it sits: manufacturer, importer, distributor or establishment selling to the public. The answer determines which formal obligations apply and how they are documented.
What changes in practice
For manufacturers and distributors, the first task is to classify products: which items contain added caloric sweeteners and which do not. It is a technical task, requiring knowledge of composition sheets, and the calculation of the tax depends on it. Then comes deciding how the cost is passed on in price to professional customers and the final consumer, and how it appears on invoices. In a company with many product lines, that classification may be the longest part of the process.
Catering and retail must also analyse their case. Depending on their position, they may be mere recipients of the passed-on cost or have obligations of their own. It is wise to clarify this with suppliers, because purchase prices may change and because the information on invoices will be the basis for calculating the tax along the chain.
What to review
The companies concerned should confirm with their tax adviser whether they are obliged and in what capacity, review their product catalogues, adjust invoicing systems and check the filing and payment calendar. It is best to start soon, because a classification or pass-on error can end in later regularisations.
Anyone operating in Catalonia and in other regions should bear in mind that this is a regional tax and that its rules may differ from those of other territories. Consumers will notice the effect, if any, in prices, which will depend on each company’s commercial decisions. While details are clarified, prudence calls for following the official texts. An internal review in good time avoids surprises at the first filing.
A new tax requires, first of all, knowing where each company sits in the chain.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
