FEAD has welcomed the European Commission’s (EC) release of new VAT proposal rates but is urging for them to be used for a lower or zero VAT rate on recycled content.
The EC’s proposal includes allowing member states to reduce VAT to a minimum of 5% on two categories of products, another category at 0% and a third reduced rate of between 0% and 5% on their selected categories of products.
Currently, the European Union allows for a minimum of 15% for all Member States plus a rate of as low as 5% on two distinct categories of products in each country.
FEAD believe that as the EC are still exploring several ways to increase the demand of recyclate, that economic incentives to this should be considered, such as reducing VAT or offering a zero rate on products with recyclable materials.
While the organisation is supporting the choice for Member States to choose their own categories, it hopes to see recycled products being selected.
It believes that the reduced rate will be “an excellent supportive measure to help realising circular economy’s goals” and also raise awareness among consumers.