Brussels — The EU Commission has proposed to fundamentally change the current VAT system by taxing sales of goods from one EU country to another in the same way as goods are sold within individual Member States. VAT will now be charged on cross-border trade between businesses. FEAD welcomes the proposal as an excellent supportive measure to realise circular economy’s goals and benefits.
FEAD members consider the VAT rates as a useful instrument to pursue EU’s political, economic and environmental objectives, therefore the private waste and resource management industry appreciates the newly proposed rules by the European Commission to give Member States more flexibility to set Value Added Tax (VAT).
Whereas the European Commission is continuing to explore several routes to boost the demand of recyclates, FEAD strongly believes that fiscal incentives to this regard should also be considered, such as lower or zero VAT rates on products with recycled content.
The new proposals on VAT will enable Member States to put in place, upon national choice, reduced or zero VAT rates for their selected categories of products. FEAD advocates such a choice to be left to Member States, allowing products with recycled content to be possibly selected amongst those benefiting from reduced VAT rates.
Now it will be up to the Council acting unanimously to give the green light to the Commission’s proposals, with the perspective that reduced VAT on targeted products or services can be in the future an excellent supportive measure to help realising circular economy’s goals and benefits, by promoting sustainable products and raising consumers’ awareness.
Source: FEAD – European Federation of Waste Management and Environmental Services