The European Commission has opened an eight-week public consultation on changing EU value added tax (VAT) rules to better fit a “circular” and low-emission economy, with responses due by 4 November 2026.
The consultation covers whether VAT rules should be adjusted for three areas: how second-hand goods are treated, when viable goods are destroyed, and how VAT deductions work for passenger cars used for business purposes, the Commission announced on Thursday.
A circular economy generally refers to keeping products and materials in use for longer through reuse, repair and recycling, rather than throwing them away, the Commission noted in its consultation description.
Stakeholders including business federations, small and medium-sized enterprises (SMEs), trade associations, national tax authorities, academics and members of the public are invited to submit views via the “Have your Say” website.
Part of wider EU law plans
The Commission said the consultation forms part of work linked to an upcoming Circular Economy Act, described as a broader package intended to support the EU’s shift towards a more sustainable and competitive economy.
It stated that the consultation will run alongside an evaluation and impact assessment — a process used by the Commission to examine policy options and likely effects — which is expected to conclude in early 2027.
The Commission said the results will feed into a legislative proposal to amend the EU VAT Directive to align it more closely with circular and low-emission economy objectives.
