Officious German tax men threaten deposit system for beer bottles

Germany | Germans are a tidy lot. They separate their garbage and take their return-refill bottles back to the shops to reclaim the deposit. Hence brewers see more than 80 percent of the country’s 3 billion beer bottles return to source. Some bottles are refilled up to 30 times.

But some overzealous bureaucrats are threatening this system. In terms of taxation they want generic return-refill bottles being treated differently from proprietary beer bottles. The German trade publication Lebensmittelzeitung broke the story in early December 2019.

The desk jockeys’ reasoning goes that proprietary beer bottles are owned by their breweries, even if they sit empty in consumers‘ basements. Generic beer bottles, on the other hand, are shared by all. Therefore, they are owned by no one in particular – they belong to a bottle pool.

If the tax men have their way, brewers using generic bottles shall no longer be able to set aside provisions for the deposit in their books.

Grim consequences

The analysis may be correct. Except that the tax men have not considered the consequences. What will happen is that brewers using generic bottles will have to liquidate their provisions for deposits, often running into millions of euros, and add these provisions to their profits. This will result in a non-recurring high tax bill. The head of the German Brewers Association, Holger Eichele, fears that many small brewers will be unable to pay their inflated income tax.     

Additionally, the revised tax code could force more breweries to switch to proprietary beer bottles. These are deemed far less environmentally friendly than generic ones as they have longer transportation routes.

German brewers hope that the bureaucrats will eventually see sense and ditch their plan.