The Czech environment minister has invited the EU member states to explore the possibility of introducing lower value-added tax (VAT) rates on products with recycled content. This step would promote the circular economy and create incentives for the use of recycled raw materials. At the EU Environment Council meeting last week, environment minister Petr Hladík listed plastics, building materials and textiles as examples of products that might be eligible for a lower VAT rate.
EU member states can apply a reduced VAT rate only to products and services listed in Annex III to Directive 2006/112/EC on the common system of VAT. However, no products with recycled content are included on the list at the moment, the Czech Republic stated in an information note for the meeting. "This means that, for instance, plastic chairs and paper boxes are always in the basic tax rate, regardless of whether they are made from recycled materials or not.” Current case law from the European Court of Justice did not allow for such a differentiation, either, the document added....
