Cut VAT on recycled content products, EU urged

A Czech government proposal for lower VAT rates for products made of recycled materials and recyclates has won the backing of European recyclers.

The European Council is being urged by the Czech Republic to explore such economic incentives in the transition to a circular and climate-neutral economy.
EuRIC, the umbrella organisation representing recycling industries in Europe, welcomes the proposal. It argues that replacing extracted raw materials with recycled materials brings significant and well-documented environmental benefits, both in terms of resource efficiency and climate and energy savings.
Fiscal incentives in the form of lower VAT rates have ‘a major role’ to play in better rewarding environmental benefits, it says, and in stimulating sustainable consumers’ choices by increasing the price competitiveness of sustainable products.

Positive step

‘It is fundamental to consider fiscal incentives as key enablers for the transition to a more circular and climate-neutral economy,’ says Emmanuel Katrakis, secretary general of EuRIC. ‘The Czech Republic’s formal request to the Council to examine the possibility of reducing the VAT rate on products using recycled materials is a first very positive step.
‘Indeed, it is necessary to ensure that tax rules at EU and national level are in line with the objectives of the Green Deal, which is often not the case.’