The CIOT has published its comments on draft regulations which would implement the necessary VAT provisions in relation to drink deposit schemes. The principle here is that a deposit is added to the price of the product, with that deposit returned in exchange for the empty packaging after the product has been consumed. For VAT purposes, the deposit is to be disregarded when calculating the value of the supply. If the packaging is not returned, the producer becomes liable for the VAT.
Source: taxjournal.com
