Soft Drinks Tax Becomes a Law
The Parliament passed the Sweetened Drinks Tax Act, according to which all drinks the sugar content is at least 5 grams per 100 millilitres of drink or that contain added sweeteners will be taxed. The new tax will enter into force on 1 January 2018.
When initially it was planned to tax juice drinks, nectars, lemonades, energy drinks, cola drinks, syrups, juices and sweetened water, then according to the passed law, dairy drinks will also be taxed (e.g. drinking yoghurts, kefirs, sweetened vegetarian milks). However, Estonia is applying for the permit for granting state aid from the European Commission in order to exempt sweetened dairy drinks as well as fruit and vegetable juices from the tax. Sweetened drinks taken out of Estonia are not subject to taxation.
The tax rate is 0.1-0.3 euro per liter, depending on the sugar and sweetener content. For example, if the sugar content is at least 5 grams, but less than 8 grams per 100 milliliters of drink, the tax rate will be 0.1 euro per one liter of drink. If the sugar content is over 8 grams, the tax rate is 0.3 euros per liter.
As a rule, the obligation to pay the tax lies with the entity that produces or imports the soft drinks or acquires them from other European Union member states. The obligation to pay the tax arises when the sweetened drink is sold in Estonia for marketing, consumption or use or delivered to a point of sale. The tax on sweetened drinks must be paid monthly. The tax is declared electronically and paid to the Tax and Customs Board by the 20th date of the month following the taxation period.
The Chamber has stood against establishing the tax on sweetened soft drinks and proposed that the Parliament not pass it. Sweetened drinks are only a small part of the entire consumed sugar and therefore establishing this tax is not an adequate solution for the weight problem. At the same time, the new tax will increase the tax and administrative burden for entrepreneurs. Unfortunately, the state has not taken into account our criticism regarding this tax.
The passed law is available HERE.