Ireland has been granted approval by the European Commission to implement a tax on sugar drinks, the Sugar-Sweetened Drinks Tax (SSDT).
The Commission concluded that the tax does not constitute State aid, but rather “the measure's scope and design are consistent with the health objectives pursued by Ireland, namely tackling obesity and other sugar-related diseases.”
Ireland applied for the tax in February and it will apply to water and juice-based drinks which have an added five grams or more of sugar per 100 millilitres.
In March Revenue released a ‘General Taxpayer Guide’ regarding the sugar tax which states that the tax will operate as an excise duty and will be administered on a self-assessment basis.
There will be two rates of tax, each depending on the sugar volume of the “ready to consume”. An SSDT rate of €16.26 per hectolitre (100 litres) will apply to drinks with a total sugar content from five to eight grams, per hectolitre.
A higher SSDT rate of €24.39 will apply to drinks with a total sugar content of eight grams or more per 100 millilitres. Once VAT is applied these rates will equate to €20 and €30 per hectolitre.
What Is Taxable?
Ready to consume drinks include supplied drinks that are prepackaged into bottles, cans, kegs, etc. It also includes drinks prepared from post-mix concentrates, i.e like in cinemas and restaurants which are served directly to customers.
The tax will also cover Concentrated SSDs, which require preparation at home to make a ready to consume drinks (adding water/ ice or carbon dioxide). These include bottles of squash, cordials and flavoured syrups.
The revenue guide states that anything that requires a substance other than water, ice or carbon dioxide it is not classified as an SSD. An example would be if sugar syrup is needed to be added to the initial substance then ‘the substance itself is not a concentrated Sugar-Sweetened Drink and would not be liable to SSDT’.
One of the most notable drinks to be affected by this tax, Coca-Cola in the North and Republic of Ireland introduced a new pack line-up in response to the upcoming tax, due to the increase in price in its classic product. Much of Coca-Cola’s product range won’t be affected by the tax, however, as the brand has plenty of sugar-free options like Coke Zero and Diet Coke.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O'Sullivan. Click subscribe to sign up for the Checkout print edition.