EPR is coming: register now to save the environment and avoid Amazon account suspension
Everybody should be talking about this: EPR, a new environmental tax with the power to do a lot of good for the planet.
But it could also catch out unwary sellers on Amazon and lead to account suspension.
Here’s what it is, and what you need to do to comply.
What is EPR?
It stands for Extended Producer Responsibility, and it’s legislation designed to protect the environment.
Effectively it places responsibility for a product, for all of its life cycle, with the producer. That includes disposal: under the latest EPR rules, waste disposal costs are shifting from taxpayers to producers.
You are considered a producer if you:
- Manufacture a product subject to EPR requirements in the relevant countries
- Import a product subject to EPR requirements in the relevant countries
- Sell a product subject to EPR requirements in the relevant countries.
EPR also creates incentives to make products, and packaging in particular, more recyclable and reusable.
How does it work?
Producers will be required to make a small additional tax payment for EPR, which will be plugged back into recycling and repurposing costs.
In most categories (apart from electronics), sellers will be asked to file their EPR annually.
When filing, you’ll be required to estimate how much of the product – for example, packaging – you will be selling over the next year by weight and volume, and your EPR contribution will be based on that.
Where does it apply?
EPR originated in Sweden in the 1980s and became a chemical tax, and has taken various forms in policy since then.
However, the current EU EPR legislation launched in France in January, and is applicable in Germany from 1 July.
From there, it is likely to expand rapidly in all EU countries. We hear that Spain and Austria will probably be the next countries to take it up.
How does it affect online marketplace sellers?
Online marketplaces – like Amazon – are now responsible for ensuring sellers on their marketplaces comply with the new EPR rules.
Sellers need to register for EPR. This gives them an EPR registration number, which Amazon and other marketplaces will require from you for validation.
You will then be paying tax for EPR, which is based on the weight and volume of your goods.
Who’s affected?
If you’re selling, importing or manufacturing goods in France or Germany, you’re liable for EPR.
EPR applies only to various categories of goods, but there’s an extremely high chance you will fall under its scope, as one of the categories is packaging.
There are various categories. In France, there are seven categories:
- Batteries
- Electrical and electronic equipment (EEE)
- Furniture
- Packaging
- Paper
- Textiles
- Tyres.
Two more will follow later: Chemicals and piercing medical equipment.
In Germany the first category to be rolled out on 1 July will be packaging; in January 2023, batteries and electronics will follow.
Be aware of one subtle difference between France and Germany with that ‘packaging’ category: in France you’ll only be liable for the primary packaging you put on your product, but in Germany the secondary packaging Amazon or any other marketplace uses counts as well.
How much will I have to pay?
Don’t panic, it’s not a huge sum – generally for most businesses we’re talking hundreds, rather than thousands.
The fees vary depending on the material – we’ve had estimates of €53 for 100kg kilogrammes of cardboard, but €140 for 100kg of plastic.
Measurements vary as well: France measures in units, Germany in kilograms. If you sell 10,000 units annually in France you’re probably looking at around €80.
What do I need to do?
You can apply for your EPR registration number online. You have to file your estimated weights and volumes of your products, and thereafter do so at least annually.
The different categories in different countries will have their own offices that require slightly different processes. While it’s not exactly difficult to file with each office, this legislation is likely to grow a lot over the coming months and years, and the admin involved will too.
You need one registration number per category you’re selling in. So if, for example, you’re selling smartphones in Germany and France, in each country you need a registration number for batteries, another for electronics and a third for packaging – so six in all.
For peace of mind that it’s all done properly, and support when you need it, we’d recommend using a tax specialist – the eCommerce specialist accountants at AVASK are brilliant.
How much time do I have?
The timeframe to get registered varies depending on country and category, but in Germany it’s currently around one week for packaging, and 8-12 weeks for electronics and batteries.
In France sellers have been given an unspecified grace period to get it sorted, but German sellers will be expected to comply from the start date of 1 July, so it’s best to get started now.
If my supplier is already registered for EPR, does that mean I don’t have to be?
As it stands, if you’re buying a product from an importer, for example in Germany, and then selling it on Amazon, also in Germany, both the importer and the Amazon seller will be liable to pay EPR on that product.
Theoretically there might be instances where your distributor, if they also sell direct to customers, could give you their EPR number, so you could use it for your products too.
But it’s very unlikely they would, as it’s an extra administrative burden – they’d have to track your products and where they’re going.
It’s much simpler to take care of it yourself – and probably safer, in terms of Amazon account suspension, because Amazon will be expecting sellers to be registered themselves.
Do Amazon Vendors have to register?
It’s slightly unclear at the moment where the liability lies for Amazon products supplied by its Vendors.
Amazon will be taking care of its own EPR requirements, but we would suggest, if you’re selling to Amazon as a Vendor in Germany or France, you could well be liable for EPR as an importer.
What happens if I don’t comply?
Amazon has announced it will be removing non-EPR-compliant listings.
We’re expecting account suspension for serial non-compliers.
Anything else I should know?
It’s important to bear in mind that the contribution you have to make will be quite small. It’s not designed to deter anyone from selling: the point of it is to help countries fill gaps in the provision of recycling and repurposing facilities, and hit looming environmental targets.
It might act as an incentive to make your business greener. It’s worth looking at the difference in fees for cardboard versus plastic – cardboard is lower because it’s more sustainable – and considering making the switch in your business.
You’re also best off assuming there will be more environmental pieces of legislation and charges in the next few years, or even the next few months. The UK, for example, is implementing a plastic packaging tax this month, which applies to businesses manufacturing or importing 10 tonnes of plastic or more. Expect more of these kinds of fees in all countries.
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Huge thanks to our friends at AVASK for sharing their EPR expertise with us. Watch our webinar with Ellie Hanson of AVASK here.