The Swedish government has appointed an investigative commission to analyze and propose a new tax regime targeting harmful chemicals in clothing and footwear. This tax aims to reduce the dissemination and risks of exposure to hazardous substances known to be detrimental to both the environment and human health.
Scope of the Tax
Initially, the tax would apply to substances that meet or are likely to meet the criteria for Substances of Very High Concern (SVHC) under the REACH regulation. This includes carcinogenic, mutagenic, and reproductive toxic substances (CMRs). Additionally, the proposed tax would cover:
- Substances with sensitizing properties
- Persistent, bioaccumulative, and toxic substances (PBT)
- Very persistent and very bioaccumulative substances (vPvB)
- Endocrine-disrupting chemicals
Antimicrobial Substances and Biocides
The commission has proposed a gradual phase-out of antimicrobial substances, arguing that the use of biocides can accelerate antibiotic resistance. Products will be classified using the subdivisions of the common customs tariff into Combined Nomenclature (CN) codes.
Proposed Tax Rate and Exemptions
The proposed tax rate is 40 SEK per kilogram for all clothing and footwear placed on the Swedish market. However, there will be potential tax deductions of up to 95% for products free from hazardous chemicals and specific biocides commonly found in clothing and footwear.
An additional tax of 19 SEK per kilogram may be imposed on products made wholly or partly of polyvinyl chloride (PVC), polyurethane, or rubber. There will also be a 19 SEK per kilogram surcharge for all-season products. A 100% tax deduction will apply to products that do not contain these chemicals.
Responsibility for the Tax
Manufacturers and importers of clothing and footwear, including those importing from other EU countries, will be responsible for this tax. For sales made outside the EU, the commission has proposed that entities subject to customs duties should also be liable for the tax.
Impact and Implementation
The tax aims to incentivize manufacturers to reduce or eliminate the use of hazardous chemicals in their products, thus promoting a safer and more sustainable market. By implementing these measures, Sweden hopes to lead the way in environmental and public health protection.
For more detailed information and to understand how this tax might affect your products, download our comprehensive white paper or contact our experts through the form at the bottom of this page.
