- The European Commission has opened a consultation on updating EU VAT rules to support the circular and low-carbon economy, with the consultation running until 4 November 2026 and a legislative proposal expected only after an evaluation/impact assessment due in early 2027.
- Three reform areas are under review: VAT treatment of used goods, VAT rules for destruction or transfer of fully functional goods, and the deduction of VAT on passenger cars used for business purposes.
- The aim is to assess whether current VAT rules discourage repair, resale, donation of surplus goods, and lower-emission transport choices, and whether they should be aligned better with circular-economy goals.
- No draft legal changes, new VAT rates, exemptions, or deduction caps have been proposed yet; businesses should instead identify processes and data that could be affected, such as margins on used goods, inventory write-offs, and fleet costs.
Source: crowe.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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