We have been informed that the Department of Finance believes that the deposit might be 'VATable' under the EU VAT Directive.

We strongly disagree.

(A DRS is a system whereby we get a small deposit returned to us once we bring back our empty cans and plastic bottles to a reverse vending machine).


In opposition to this we have written to Minister for Environment, Climate and Communications Eamon Ryan and Minister for Finance Paschal Donohoe. Our arguments are very clear on this issue:

1. Other EU countries have their own DRS for drinks containers and most of the deposits are not 'VATable'. Such countries include the Netherlands, Norway, and the most recent DRS systems in Estonia, Lithuania and Latvia.  Portugal, Spain and Austria are in the midst of adopting their own DRS system and there is no mention of applying VAT.    

2. We need to separate the product from the packaging.  The product, such as a soft drink or beer, will continue to attract VAT, but the deposit is levied on the packaging in order to encourage its collection for recycling. 

3. The deposit is not a tax, nor is it something that adds value during production, rather it’s an environmental measure, an incentive to encourage good behaviour change. 

4. If the public views this as another tax, the positive view of the system may be marred. 

5. And finally but most importantly this policy sets a bad precedent. 


There must be an incentive for the consumer to bring the container back and a DRS with a returnable deposit is a suitable way of getting the packaging back for reuse. 


If the deposit above is 'VATable', we worry that any deposit on reusable containers in the future will also be 'VATable' every time the container is used and the deposit imposed.  This will be a hardship for businesses and consumers alike and may defeat any new reuse system. 

We are promoting the switch from disposable packaging to reusable packaging that can be refilled and reused over and over. 

 A new reusable packaging infrastructure needs to be developed which will standardise the take-away containers (including coffee cups and other food packaging),craft the tracking technology, establish the collection, sanitisation and redelivery logistics and educate the industry and public on a new way of consuming (buying the product and renting or borrowing the packaging). 

Take Action: We ask you to support this view and determine that the deposit on one-way drinks containers and any new reusable container is not subject to VAT. Email your public representative.