The mechanism of product packaging deposit - return under the Draft Law on Environmental Protection 2020

The mechanism of product packaging deposit - return under the Draft Law on Environmental Protection 2020​ (Illustrative Image)

Article 146 of the Draft Law on Environmental Protection (Revised) has introduced new regulations on product packaging deposits and returns as follows:

- Organizations and individuals producing or importing products that require the collection of packaging are allowed to add a deposit amount to the product price. The deposit amount is not included in the product price and is not considered revenue for tax calculation;

- Organizations and individuals are responsible for designing product packaging to meet standards for reuse and recycling and must publicly disclose the deposit amount for each type of product packaging;

- Organizations and individuals returning packaging will be refunded the deposit amount indicated on the product packaging. Organizations and individuals producing or importing products are responsible for establishing and announcing packaging collection points;

- Organizations and individuals producing or importing products are responsible for refunding the deposit amount to the collection points upon receiving the packaging and paying collection costs to the collection points;

- The deposit amount not refunded within the year must be recorded by organizations and individuals as taxable revenue according to the law in Vietnam.

Thus, producers can add a deposit amount to the product price, and consumers will be refunded the deposit amount indicated on the packaging.

More details can be found in Draft Law on Environmental Protection (Revised 2020)

Ngoc Tai

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