Revenue eBrief No. 101/24

28 March 2024

Deposit Return Scheme

A new Tax and Duty Manual on the Deposit Return Scheme (DRS) is now available.

The DRS came into operation on 1 February 2024 under environmental law, and provides for a small refundable deposit on drink products supplied in plastic bottles and aluminium or steel cans.  The deposit is refunded to a person who returns an empty container to the DRS for recycling or reuse.

The TDM outlines the VAT treatment appropriate to DRS deposits, as provided by Section 92A of VATCA 2010 (inserted by Finance (No.2) Act 2023), and the VAT (Regulation 34B) (Amendment) Regulations 2024.  For supplies of drink products in the supply chain (e.g. by manufacturer or importer, wholesaler, retailer) no VAT arises on the DRS deposit.  VAT on the deposit only arises where the container is not returned under the DRS, and in this case it is the Scheme Operator for the DRS who is liable to account for and pay the tax.