Value Added Tax Consolidation Act 2010 section 92A

Deposit Return Scheme

Section 92A sets out a special VAT treatment for deposits charged under the Deposit Return Scheme on single-use drinks containers, deeming the taxable amount of those deposits to nil while in the supply chain and making the scheme operator the accountable person for VAT on unredeemed deposits.

• Where a deposit is charged on an in-scope product under the Deposit Return Scheme, the taxable amount referable to the deposit is deemed to be reduced to nil for VAT purposes while the product is moving through the supply chain.
• If the in-scope bottle or container is not returned for recycling or reuse, the taxable amount referable to the deposit reverts to the full deposit amount and VAT becomes chargeable at the standard rate.
• The operator of the Deposit Return Scheme is deemed to be the accountable person responsible for accounting for and paying VAT on deposits relating to unreturned containers, using a formula based on total deposits receivable less total deposits refundable in each taxable period.
• Businesses supplying in-scope products throughout the supply chain do not incur any VAT liability on the deposit element, and the VAT treatment of the deposit does not affect normal VAT deductibility.