CFE Statement on VAT & the Circular Economy
CFE Opinion Statement FC 5/2026
CFE responded to the Commission’s consultation on VAT and the circular economy, examining how the VAT framework can better accommodate circular business models while providing greater legal certainty and workable compliance requirements for businesses.
The Statement addresses the VAT treatment of used, refurbished and remanufactured goods, including practical difficulties associated with the margin scheme; the VAT treatment of donations and destruction of viable goods; and VAT deduction rules for passenger cars.
CFE calls for clearer rules and improved verification mechanisms concerning the VAT treatment of second-hand goods, including consideration of an EU-wide or interoperable mechanism for verifying the application of the margin scheme. CFE also recommends examining clearer and more harmonised rules for donations of viable goods and greater harmonisation of VAT deduction rules for passenger cars.
