This report illustrates the relationship between VAT and the circular economy, and provides some indications of where VAT may play a role in the transition from a linear to a circular model.
Concrete examples include repair services for clothing (textiles), bicycles and footwear, more intense use of passenger cars and bicycles (transport), second-hand goods in general, as well as a number of measures in the construction and food industries, etc. The report discusses the various techniques used in VAT (such as a reduced VAT rate, a reduced taxable amount, exemptions, etc.), and also indicates at which policy level a change in regulations is possible (Member State or EU).
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