Dunnes Stores ordered to pay Revenue €8.53m concerning plastic bag levy

The 15-year-long tax dispute may yet be decided in the High Court

The initial bill included plastic bags supplied at the check-out and the revised assessment now only concerned 'flimsy’ bags that are generally made available to customers. Picture: iStock

The Tax Appeals Commission (TAC) has ruled that family-owned retail giant Dunnes Stores must pay an amended €8.53m Revenue Commissioners tax bill concerning the plastic bag levy.

However, the €8.53m bill is €28m less than the original €36.57m net aggregate assessment served on Dunnes Stores by the Revenue Commissioners for the environmental levy in 2009.

A new 60-page TAC ruling on the 15-year-long tax dispute reveals  Revenue wrote to the TAC in November 2021 to state it had reduced the total amount of the levy bill on Dunnes Stores by €28m, from €36.57m to €8.53m.

In its November 2021 letter to TAC, Revenue said the bill was now €8.53m consequent to a detailed review of the calculations supporting the assessments. The TAC ruling does not name Dunnes Stores.

The initial bill included plastic bags supplied at the check-out and the revised assessment now only concerned "flimsy" bags that are generally made available to customers at appropriate points throughout a supermarket for food hygiene and safety purposes to contain products such as fish, meat, poultry, fruit and vegetables.

In the tax row, Dunnes Stores and Revenue were in agreement on the quantum of €8.53m owed if the TAC was to find the bags at issue are not "excepted bags" under the relevant Waste Management (Environmental Levy) Plastic Bags Regulations 2001.

The €8.53m bill concerns €4.6m for July 2004 to June 2005 and €3.88m for July 2005 to June 2006.

Appeal

In its appeal against the revised Revenue bill of €8.53m at the TAC, Dunnes Stores argued no amounts were due in respect of the levy in respect of the plastic bags at issue.

Commissioner, Claire Millrine has found, after a one-day hearing into the dispute in May of this year, the plastic bags at issue are not exempt from the levy and the €8.53m assessment should stand after finding that the bags are not "excepted bags" under the regulations.

In the initial aggregate €36.57m bill, Revenue had given credit for payments of €15.3m by Dunnes concerning the bag levy.

The TAC ruling comes four years after Dunnes Stores lost its Supreme Court appeal concerning the validity of laws under which the Revenue Commissioners raised the tax assessments of €36.5m.

Ms Millrine said neither Dunnes nor Revenue had samples of the plastic bags at issue.

The dispute may yet be ultimately decided by the High Court, as the TAC ruling discloses it has been requested to state and sign a case for the opinion of the High Court in respect of the determination.