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Circular to members re Eco Contribution Act
09 March 2004
When not to charge Eco-Tax
If chargeable products have been purchased by
the retailer prior to September 1, 2004, products cannot be charged
Eco-Tax.
Such products must be covered by a tax invoice dated prior on or
prior to August 31, 2004.
The principle is very simple: if you did not
pay Eco-Tax on the product purchased from a supplier you cannot charge Eco-Tax
to your customers. The penalties for abuse are too large for retailers to
contemplate it.
When to Charge Eco- Tax
If a product has been
purchased (tax invoiced) on or after September 1, 2004, then Eco-Tax is included
in the price of the product. Retailers sell at the new price plus their margin
plus VAT and that’s it. Retailers do not charge Eco-Tax again. This would be an
abuse. Retailers pay to suppliers, they do not pay Eco-Tax directly to the VAT
Department. Retailers do not register as Eco-Tax collectors. They simply pay
more to the supplier and charge price accordingly. Responsible for Eco-Tax is
the supplier i.e. the direct importer or producer.
Importers
/Retailers
If a retailer is also the direct importer of the product, then
Eco-Tax is charged on all sales made after 1st September 2004 on all Eco-Taxed
products. This provided that no tax invoice exist between one legal entity that
imports and another legal entity that retails and dated prior to September 1,
2004.
All importers, producers and importers/retailers must register as
Eco-Tax collectors on the prescribed form available form the VAT Department.
Wholesalers and Retailers do not register.
Regards,
Vincent
Farrugia
Director General
