We are helping to conduct a green revolution in the field of food waste in Estonia, a matter of international importance. This project has required our team to conduct a thorough analysis on various relevant regulations on both Estonian and EU level.
In Estonia about 167 000 tonnes of food goes to waste each year, with an estimated value of EUR 164 million. Limiting the amount of food waste is one of the most important goals of the European Union. In May 2018 the European Parliament and the Council of the European Union also passed directive 2018/85 which requires member countries to limit the number of food waste created in each step of the food chain. The Estonian Food Bank has estimated that close to 14 000 families get help with food through them, but the need is much bigger.
Our experts have taken it upon themselves to help solve this problem. Together with the Green Tiger (a NGO we have joined) and the Estonian Chancellor of Justice, the first ever food related legal clinic was held in Estonia. The purpose of the project was to understand the legal obstacles in creating less food waste as it is often thought that, for example, food donation by stores is not possible due to the law.
Clarity and better regulations needed
As a part of the project, our tax team analysed tax regulations connected to the matter. The analysis showed that changes in tax regulations are crucial to better motivate companies donate food, as currently the donation of food by companies can lead to a tax liability. Our team suggested a solution – to expand the circle of persons to whom food can be donated tax-free. Another solution proposed was be to increase the thresholds within which such donations can be made tax-free. In the case of the preferential tax, the solution could be to introduce specific rules that would allow food products with a low or no market value to be granted to employees without special preferential taxes. Our analysis also showed that in several Member States of the European Union, tax incentives are the main lever, which is why businesses prefer to donate food.
Based on our analysis we presented the Estonian Chancellor of Justice with our recommendations for improving the situation. Our solutions promise to have a positive impact on thousands of families, as well as numerous organisations and the planet in general.
Our client team
The analysis was one of over 20 projects that receive pro bono legal and tax advice from Sorainen in the Shared Mission programme in 2021.