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DAIRY AND PLANT-BASED BEVERAGES INCLUDED IN ESTONIA’S SUGAR DRINK TAX

Thursday, July 6, 2017


Fifteen new Acts were passed by Estonia’s government, the Riigikogu, including a sugar tax.  In the Government’s Sugary Drink Tax Act, drinks with a sugar content of at least 5g per 100 milliliters, or with a sweetener added, is subject to taxation at rate according to sugar content or the adding of sweetener.  The term “sugary drink” also covers milk-based drinks, that is, milk drinks containing sugar or sweetener.  Such drinks include sweetened drinkable yogurts, kefirs and plant milks, like soy milk.
    Permission to grant state aid for sweet milk drinks and 100% fruit and vegetable juices, due to their nutritional value, will be applied for from the European Commission.  They will be exempted from the tax if and when permission is obtained.  
The Act provides for a two-year  transition period for the taxation of drinks with a higher sugar content to allow time for producers to change the formulation of their products if they wish to lower the sugar content, and for consumers to become used to new taste.   As of January 1, 2018, not all sugary drinks in interim warehouses will be taxed automatically.  All drinks delivered to places of sale before January 1, 2018 will be exempt from tax, in order to reduce administrative issues.
 

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