Act LVI of 1995

Act LVI of 1995

on Environmental Protection Product Charges and the Environmental Protection Product Charges of Certain Products

Chapter I

The Purpose of the Act

Section 1

The purpose of the Act is to generate the funds necessary for the abatement and prevention of environmental damage caused by products loading or posing hazard directly or indirectly to the environment or some component thereof during or following the manufacture or use of the said products, as well as to contribute to the abatement of environmental pollution and the encouragement of activities aimed at the economical management of natural resources.

The Scope of the Act

Section 2

(1) For products subject to product charges as defined in subsection (3) - including products put in commercial distribution jointly with other products or as parts of other products

a) the first domestic distributor or user for own purposes of products subject to product charges and manufactured in Hungary as well as

b) the importer of products subject to product charges [paragraphs a) and b) hereinafter together: obligor] shall pay environmental protection product charges (hereinafter: product charges).

(2) The distributor of products subject to product charges shall pay a fine corresponding to one and a half times the product charges to the Central Environmental Protection Fund (hereinafter: Fund), if no product charges have been paid for the products it distributes that are burdened by the obligation to pay product charges.

(3) For the purposes of this Act, products subject to product charges shall be:

a) fuels (directly polluting products),

b) tyres,

c) cooling apparatuses and refrigerants,

d) packing materials,

e) batteries,

[paragraphs b) through e) hereinafter together: waste generating products].

Rules of Procedure During the Payment of Product Charges

Section 3

(1) With the exception of the case described in subsection (2), the obligation to pay product charges shall arise on the trade date shown on the invoice made out when a product subject to product charges and manufactured in Hungary is sold for the first time in Hungary or on the date when the use thereof for personal purposes is accounted for as expenditure.

(2) The provisions of Act LXXVIII of 1991 on consumption tax and consumer price subsidy (hereinafter : Cps.) shall apply to the obligation to pay product charges on fuels.

(3) The obligated shall pay the product charges (the product of the basis of product charges and the rate of product charges) determined on the basis of the quantity of products subject to product charges (the basis of product charges), sold or used for own purposes in Hungary, to the account held by the Inland Revenue Office (hereinafter: taxation authority), indicated in the official gazette of the Ministry of Finances and shall present returns on the obligation to pay product charges to the taxation authority, in accordance with the provisions of Cps. and those of consumption tax of the Act on Taxation.

(4) The taxation authority shall check the fulfillment of the establishment and payment of the product charges paid for products subject to product charges and put in commercial distribution or used for personal purposes in Hungary.

Section 4

(1) In the case of imported products subject to product charges, the obligation to pay product charges shall arise on the date when the products subject to product charges are cleared through the customs.

(2) The National Headquarters of the Customs and Finance Guard (hereinafter: customs authority) shall establish (impose) with a decision the obligation to pay product charges when the products are cleared through the customs for domestic distribution or in a procedure with customs benefit (licence brand), as well as during measures taken by the customs authorities for domestic distribution, considered the same as customs clearance, on the basis of the rules of procedure of the Taxation Act pertaining to the taxes burdening product imports.

(3) The customs authority shall transfer the product charges paid to, (collected) or encashed by the customs authority to the Fund by the 15th day of the month following the subject month.

Payment Benefits for Product Charges

Section 5

The obligor shall pay one half of the product charges in the case of products subject to product charges that are entitled to bear the trade-mark "environmentally friendly", in accordance with the provisions of a separate legal rule (payment benefits for product charges).

Use of the Amount Collected Through Product Charges

Section 6

In issues not regulated in this Act, the product charges may be used in accordance with the contents of Chapter IV on the Central Environmental Protection Fund of Act LXXXIII of 1992 on Certain Separated State Funds (hereinafter: SFA). At least 75% of the part thereof qualifying as revenues with restricted use as defined in SFA may be spent primarily on the support of goals and objectives specified in subsection (1), while the remainder, for those specified in subsection (2), unless the chapters on the individual product charges provide otherwise.

(1) Tasks of environmental protection in accordance with Section 31, subsection (1), paragraph a) of SFA:

a) a single contribution to investment projects and developments

aa) preventing environmental pollution caused and hazards posed by products subject to product charges or by substances released therefrom, abating the load to the environment by the same, and aiming at the establishment of systems monitoring the level of loading,

ab) encouraging the development of environmentally friendly consumer behaviour and the use of environmentally friendly products subject to product charges,

ac) promoting the collection of wastes generated from products subject to product charges and serving the recuperation and safe disposal thereof;

b) provision of regular assistance for the

ba) reuse,

bb) recycling,

bc) in the absence of reuse and recycling, for energy recovery,

bd) collection

of products subject to product charges that generate waste or substances released therefrom.

(2) Tasks of environmental protection in accordance with Section 31, subsection (1), paragraphs b) and c) of SFA:

a) provision of funding for projects serving the prevention and clean-up of environmental damage caused or hazard posed by products subject to product charges or by substances released therefrom, to the extent specified in SFA,

b) establishment of systems preventing environmental pollution and monitoring the level of loading by products subject to product charges or by substances released therefrom,

c) development of personal and material conditions for measures taken by the central government to promote the efficiency of utilization,

d) influencing the environmental attitude of the public,

e) to provide funding for the collection and use of the product charges and the control thereof.

Rules for Regular Assistance

Section 7

(1) The assistance defined in Section 6, subsection (1), paragraph b) may be provided through tenders, in conformity with the provisions of SFA on assistance to be provided through tenders and in accordance with the contents of the annual Guidelines for Assistance.

(2) The entitlement for regular assistance of the magnitude specified in the annual Guidelines for Assistance may be acquired through tenders for up to three years. In the case of developments promoting the implementation of nationwide government or sectoral programmes, the Fund Manager may set the period of entitlement at four years.

(3) Regular assistance awarded through tenders may be applied for quarterly, by the 15th day of the month following the quarter, subsequently, in accordance with the quarterly report.

(4) Regular assistance may be applied for on the basis of the quantity of waste recuperated or used for energy recovery.

(5) The Fund Manager shall transfer the annual assistance of the magnitude specified in the annual Guidelines for Assistance to the entitled party within 30 days reckoned from the receipt of its justified application.

Section 8

The Fund Manager shall check the fulfilment of the establishment and legitimate use of the regular assistance, by appropriately applying the provisions contained in the chapters of the Taxation Act on control, legal consequences and the tax administration procedure.

Chapter II

Environmental Protection Product Charges on Tyres

Section 9

(1) Product charges shall be paid on the tyres of motor vehicles, tractors used in agriculture, slow vehicles, (semi-) trailers, and aircraft (hereinafter: PCT).

(2) PCT shall also be paid for tyres imported through passenger and gift traffic.

(3)

Section 10

(1) The basis for PCT shall be the mass of the tyres.

(2) The rates of PCT are contained in Schedule No. 1.

Chapter III

Environmental Protection Product Charges on Packing Materials

Section 11

(1) Product charges shall be paid on packing materials (hereinafter: PCPM).

(2) Exemption to the extent defined in subsection (3) may be obtained from a part of PCMP, under terms specified in a separate legal rule, with respect to which the obligor collects, buys back and reuses, recycles or uses for energy recovery (hereinafter together: treats) its packing material subject to product charges. A contract shall qualify as treatment that is concluded by the manufacturer or importer of the packing material (primary obligor) with an organization co-ordinating the treatment as well as with the buyer of the packing material sold, in which the organization co-ordinating the treatment or the buyer of the packing material (secondary obligors) assumes the obligation to pay the product charges from the primary obligor.

(3) Full exemption may be obtained from PCMP, if the obligor has treated packing materials of a quantity corresponding to the obligatory proportion of treatment specified in a separate legal rule. When the exemption is determined, the ratio of the treated packing materials and the obligatory proportion of treatment shall be taken into consideration.

(4) The organization co-ordinating the treatment specified in subsection (2) shall be a legal entity that organizes and carries out the treatment of the packing materials and which was established with the participation of the manufacturers and distributors of the packing materials.

Section 12

(1) The basis for PCPM shall be the mass of the packing materials.

(2) The rates of PCMP are contained in Schedule No. 2.

Section 13

(1) PCPM shall qualify as revenue with 100% restricted use.

(2) At least 85% of PCPM shall be spent on the goals defined in Section 6, subsection (1) - including also the assistance for the establishment of organizations co-ordinating the treatment.

(3) In case the objectives mentioned in Section 6, subsection (1) are supported from PCPM, the Guidelines for Assistance shall be developed and the tender shall be awarded on the basis of the recommendation of an Advisory Council defined in a separate legal rule.

Chapter IV

Environmental Protection Product Charges on Cooling Apparatuses and Refrigerants

Section 14

Product charges shall be paid on cooling apparatuses and refrigerants (hereinafter: PCC).

Section 15

(1) The basis of PCC shall be,

a) in the case of cooling apparatuses, the number of units of cooling apparatuses, distinguished by the nominal refrigeration volume and the quantity of the refrigerant thereof,

b) in the case of refrigerants, the mass of the refrigerant.

(2) The rates of PCC are contained in Schedule No. 3.

(3) The method of determining PCC are contained in Schedule No. 4.

Chapter V

Environmental Protection Product Charges on Fuels

Section 16

Product charges shall be paid on fuels (hereinafter: PCF).

Section 17

(1) The basis of PCF shall be the compensated volume of the fuel, converted to the temperature of 15’C.

(2) The rates of PCF are contained in Schedule No. 5.

Chapter VI

Environmental Protection Product Charges on Batteries

Section 18

(1) Product charges shall be paid on batteries (hereinafter: PCB).

(2)

Section 19

(1) The basis of the product charges shall be the mass of the batteries.

(2) The rates of PCB are contained in Schedule No. 6.

Closing Provisions

Section 20

For the purposes of this Act,

a) "product charges": payments made to the Central Environmental Protection Fund to support activities performed for the abatement and prevention of environmental loading on the basis of the manufacture and import of products that especially load or pose special hazard to the environment or some component thereof during or following the use of the said products,

b) "reuse": the repeated use of used waste-generating products,

c) "recycling": the use of the materials of used waste-generating products for the manufacture of some product,

d) "energy recovery": the incineration of waste-generating products to recuperate energy, by observing the relevant regulations on environmental protection,

e) "safe disposal": an activity specified in a separate legal rule,

f) "putting in commercial distribution": the sale of products subject to product charges, including also the distribution thereof as part of other products or together with other products,

g) "import": unless this Act provides otherwise, the provisions of the Act on Consumption Tax and Price Subsidies shall be applied for products subject to product charges,

h) "packing material": a temporary wrapping of specific material and structure designed for containing or forming one unit of product(s) or smaller packing materials and generally manufactured within the framework of industrial activities.

Section 21

(1) The Minister of Environmental Protection and Regional Planning shall be authorized to establish, in agreement with the concerned ministers, the detailed rules on the delimitation and classification of the scope of products subject to product charges, the publication of the ITJ numbers and customs-tariff numbers thereof, the detailed conditions of the payment of product charges and fines, the provision of benefits as well as regular assistance, the obligation to report, the requirements of keeping records and the use of the product charges.

(2) The Government shall be authorized to establish detailed conditions for having recourse to exemption from PCPM, the obligatory proportion of treatment, and the composition and responsibilities of the Advisory Council in a decree by 30 September 1995 at the latest.

(3) The Government shall be authorized to establish in a decree the quantity of used tyres that may be imported.

Section 22

Section 29, subsection (1), paragraph b) of Act LXXXIII of 1992 on Certain Separated State Funds shall be complemented by the following subparagraphs bb) through be):

(The revenue sources of the Fund:)

"bb) environmental protection product charges on tyres,