The guarantee-return system (GRS) emerged out of the need to identify solutions for optimizing the management of non-reusable primary packaging.

Starting from November 30, 2023, the guarantee-return system (GRS) will become functional in Romania, in accordance with national legal provisions. This is the date from which consumers will pay a guarantee of 0.50 RON when purchasing a bottled beverage, and after emptying the packaging, they will return it to a collection point organized by retailers to receive the initially paid guarantee value.

GRS for non-reusable primary packaging was created with the idea of promoting recycling and efficient waste packaging management, both by the public and companies. The system is applicable to non-reusable primary packaging made of glass, plastic, or metal, with volumes ranging from 0.1 liters to 3 liters, used for beer, beer mixes, alcoholic beverage mixes, cider, other fermented beverages, juices, nectars, soft drinks, mineral water, and all types of drinking water, wines, and spirits, which must be labeled with a specific marking.

Legally, companies that produce, import, and trade packaged products have been obliged to participate in a collection and recycling system for GRS non-reusable primary packaging. Minimum annual return targets for GRS packaging have been established. In Romania, this system is regulated by Government Decision No. 1074/2021 regarding the establishment of the guarantee-return system for non-reusable primary packaging (published in the Official Gazette No. 955/06.10.2021), which establishes the necessary rules for implementing GRS for non-reusable primary packaging, both for products manufactured domestically and for imported or intracommunity purchased products.

“In the context where in Romania, about 38% of abandoned waste consists of plastic, glass, and metal waste, and considering that EU Directive 62/94 on packaging and packaging waste provides for the possibility of setting up return systems by member states, the legal framework for organizing this guarantee-return system has emerged. The purpose of this system is to collect items from the market and introduce packaging into a circular economy, in addition to improving the environment’s quality, helping Romania achieve national collection and recycling targets set at the European level,” said Daniela Neagoe, Senior Manager, Global Trade, EY Romania.

Read more about

EY European DEI Index: companies in Europe are still behind in improving diversity

read more

GRS Mechanism and Tax Treatment of the Guarantee The guarantee must be clearly indicated in fiscal documents, such as the invoice or sales receipt. Romanian legislation does not provide specific tax treatment for the GRS guarantee. There are provisions stating that packaging that circulates between the supplier and the customer through exchange without invoicing is not subject to VAT. On the other hand, packaging that circulates through invoicing is subject to value-added tax.

“Given that there is currently no specific provision in the Fiscal Code that defines whether the guarantee related to GRS packaging is or is not within the scope of VAT, we believe that clarification on this matter by tax authorities would be appropriate, as well as the treatment applied to unreturned guarantees, namely whether VAT collection is required for unreturned guarantees. Separately, we draw attention to other implications generated by the guarantee-return system, especially in terms of accounting registration, reporting in the SAF-T declaration, as well as interaction with the electronic invoicing standard,” explains Sînziana Radu, Manager, Indirect Taxes, EY Romania.

Producer Obligations Producers will need to adhere to a series of reporting, record-keeping, marking, and other obligations, as outlined in the legislative provisions, such as:

• Entering into a contract with the GRS administrator, RetuRO.
• Reporting packaging in the computer program provided by RetuRO.
• Maintaining records of products by material type, weight, and volume, as well as records of guarantees and their transmission to RetuRO by the 10th day of the following month.
• Paying the guarantee value by the 25th day of the following month after introducing the products into the market to RetuRO.
• Labeling products with the representative GRS symbol and the EAN code containing specific information.

Retailer Obligations According to the legislation, retailers also have a series of obligations, including:

• Entering into a contract with the GRS administrator.
• Reporting packaging in the computer program provided by the GRS administrator.
• Maintaining records of the total number of products in GRS packaging sold, broken down by product type.
• Indicating the guarantee value on the shelf and on fiscal documents.
• Paying the guarantee value to the economic operators from whom they purchase packaged products and refunding the guarantee value when returning GRS packaging.

Retailers will only be able to sell products from manufacturers registered in the GRS or from distributors of these manufacturers.

“Products introduced into the national market in GRS packaging, as defined in Government Decision No. 1,074/2021, will be identified by new unique numerical structures intended for placement, sale, collection, and recycling through the GRS. In addition to this EAN barcode, produced in accordance with the specifications provided by the GRS administrator, the label of products packaged in GRS packaging will also include the representative symbol established by Order No. 1,802/2023 for the approval of the symbol indicating membership in the guarantee-return system,” said Adriana Nedelescu, Senior Consultant, International Trade, EY Romania.

Contribution to the Environmental Fund for GRS Packaging Starting from January 1, 2024, according to a draft amendment to Government Emergency Ordinance No. 196/2005 on the Environmental Fund, a contribution to the Environmental Fund will be due from economic operators who introduce non-reusable primary packaging subject to GRS into the national market.

For the difference between the quantities of non-reusable primary packaging corresponding to the minimum annual return targets (65% for 2024) and the quantities of non-reusable packaging actually returned, a contribution of 0.5 lei for metal packaging and 1 leu (double the guarantee) for glass and plastic packaging will be payable.

Considering the very short time until the implementation of this system, it is recommended that companies initiate the establishment of internal procedures necessary for the implementation of GRS within the company as soon as possible. This includes aspects such as:

• The flows regarding the guarantee and packaging of products subject to GRS.
• The management of losses/destruction of GRS packaging.
• The labeling of products subject to GRS with new requirements (e.g., pictogram and EAN code).
• The accounting records related to the guarantee, administration fee, and management fee.
• The tax treatment of the guarantee, its representation on invoices in various situations (e.g., free products).
• The identification of products subject to GRS, which can sometimes be challenging, especially for composite packaging.
• The preparation of waste collection points for GRS packaging.
• Compliance with waste regulations.