Income Tax Treatment of Deposits under the Beverage Container Return Scheme (BCRS)

Key requirements

The scheme began on 1 April 2026 and applies a 10-cent deposit to regulated beverage containers. Deposits collected or redeemed are not taxable business income, while deposits paid are not deductible business expenses. This guidance applies to businesses, not the scheme operator. IRAS generally does not require tax adjustments where deposits are reflected in the profit and loss account, because amounts paid are expected to be recovered from customers or returns. A limited exception arises where products are supplied for non-deductible purposes and collection is waived under the statutory rules; relevant deposits may need adding back. Separate the deposit from the product price and follow the examples for office use, donations or other circumstances rather than assuming all costs of beverages have identical treatment.