Skip to main content
This page outlines the income tax treatment of deposits under the Beverage Container Return Scheme (BCRS), which was implemented on 1 April 2026. The income tax treatment applies to businesses, including companies and self-employed persons such as sole-proprietors and partners in a partnership. It does not apply to the scheme operator.

What is BCRS?

The Beverage Container Return Scheme (BCRS) was implemented in Singapore on 1 April 2026. Under the scheme, pre-packaged beverages in plastic and metal containers ranging from 150 millilitres to 3 litres (‘regulated beverage products’) will carry a 10-cent deposit (‘BCRS deposit’). These containers can be returned at any ‘Return Right’ Reverse Vending Machines (RVMs) across Singapore to redeem the deposit. 
 
The scheme is managed by Beverage Container Return Scheme Ltd. (BCRS Ltd.), a not-for-profit company licensed by the National Environment Agency (NEA) as the scheme operator. 

More information about the scheme can be found at www.nea.gov.sg/bcrs.

Income tax treatment for BCRS deposits 

Under the Resource Sustainability Act 2019 (RSA), producers (i.e. manufacturers and importers) of regulated beverage products are required to pay BCRS deposits in respect of regulated beverage products supplied in Singapore to the scheme operator. In addition, the RSA provides that any person supplying a regulated beverage product in Singapore must collect the BCRS deposit from the customer, and requires the customer to pay the BCRS deposit. 

The RSA provides that BCRS deposits do not form part of the price for the regulated beverage products. They represent amounts collected and paid by businesses solely in accordance with the requirements of the BCRS, without any profit motive or commercial intent. Accordingly, BCRS deposits collected/redeemed do not constitute business income and are not taxable. Likewise, BCRS deposits paid do not constitute business expenses that are deductible for income tax purposes.  

Given that BCRS deposits do not form part of the price for the regulated beverage products, BCRS deposits are likely not recognised in the profit and loss statement and no tax adjustments are therefore required. However, if the BCRS deposits are recognised in the profit and loss statement, to ease compliance burden for businesses, tax adjustments are also not required in such cases, as BCRS deposits paid are expected to be recovered over time through deposits collected from customers or refunds redeemed (e.g. from the RVMs). Tax adjustments are required only in limited situations where regulated beverage products are supplied for purposes for which the related expenses are not tax deductible and the collection of BCRS deposits had been waived under the RSA (e.g. donations). In such cases, the BCRS deposits paid in connection with the non-tax deductible expenditure should be added back in the tax computation. Please refer to the FAQs for examples.  

 

  1. My company purchases regulated beverage products for business purposes, such as for office events or for use as ingredients in the preparation of food or drink in food and beverage (F&B) operations. We collect the empty containers and return them at RVMs to redeem the BCRS deposits. What is the income tax treatment for the BCRS deposits?

    BCRS deposits redeemed at RVMs do not constitute business income and are not taxable. Likewise, BCRS deposits paid upon purchase of regulated beverage products do not constitute business expenses and are not tax deductible. No tax adjustments are required if BCRS deposits are not recognised in the profit and loss statement. If the BCRS deposits are recognised in the profit and loss statement, to ease compliance burden for businesses, tax adjustments are also not required in such cases, as BCRS deposits paid are expected to be recovered over time through refunds redeemed from RVMs.

  2. My company is a F&B operator that participates in the Return Right F&B Scheme. We collect the containers of regulated beverage products consumed during dine-in without charging customers the BCRS deposits and return the empty containers at RVMs to redeem the BCRS deposits. What is the income tax treatment for the BCRS deposits?

    BCRS deposits redeemed at RVMs do not constitute business income and are not taxable. Likewise, BCRS deposits paid upon purchase of regulated beverage products do not constitute business expenses and are not tax deductible. No tax adjustments are required if BCRS deposits are not recognised in the profit and loss statement. If the BCRS deposits are recognised in the profit and loss statement, to ease compliance burden for businesses, tax adjustments are also not required in such cases, as BCRS deposits paid are expected to be recovered over time through refunds redeemed from RVMs.

  3. My company gives out regulated beverage products free of charge for marketing, sponsorship or donation purposes. BCRS deposits are not collected (i.e. waived under the RSA) from parties who consume the beverages and it is not operationally feasible to collect back the empty containers for return at RVMs. What is the income tax treatment for the BCRS deposits paid?

    The company is deemed to have absorbed the BCRS deposits when it gives the regulated beverage products for free and cannot collect back the empty containers for return at RVMs to redeem the BCRS deposits (see Frequently Asked Question 13 in BCRS Ltd.’s website). Where the BCRS deposits paid are recognised in the profit and loss statement, tax adjustments are not required if the BCRS deposits are paid in connection with tax deductible expenses (e.g. marketing and sponsorship). Conversely, tax adjustments will be required (i.e. to add back into the tax computation) if the BCRS deposits are paid in connection with non-tax deductible expenses (e.g. donations-in-kind).

  4. What is the income tax treatment of other expenses incurred in connection with the BCRS (e.g. producer fees)?

    General income tax principles will apply. Generally, business expenses that are revenue in nature are deductible if they are wholly and exclusively incurred in the production of income. For example, producer fees are deductible for producers as these expenses are incurred in the course of their business operations.

  5. What is the income tax treatment of grants/ payouts related to BCRS?

    Grant/ Payout Administering Agency/ Entity Purpose of Grant/ Payout Amount of Grant/ Payout Income tax treatment of Grant/ Payout
    BCRS Producer Transition Grant Scheme operator (i.e. BCRS Ltd) To help producers in making the transition to the BCRS. The grant is designed to offset costs such as product registration fees, producer fees and the cost of scheme stickers. Up to $2,500 per producer Taxable as the grant is revenue in nature
    One-time support for F&B operators participating in the Return Right F&B Scheme (RRFS) NEA To support additional efforts and operational adjustments by F&B operators participating in the RRFS. $500 per food shop Taxable as the grant is revenue in nature

  6. Is there any additional record keeping requirement due to the implementation of BCRS?

    The usual record keeping requirements will apply. Businesses must maintain proper records of their financial transactions and retain the source documents, accounting records and schedules, bank statements and any other records of transactions connected with the business for at least 5 years from the relevant Year of Assessment. This will help businesses explain the transactions relating to their income, business expenses, and purchases, in response to queries from IRAS (if any).

  7. What is the GST treatment for GST registered businesses affected by the BCRS?

    You may refer to IRAS webpage on GST and BCRS Deposit for information on the GST treatment and requirements for GST registered businesses affected by the BCRS.