07.03.23

Lower VAT rate for recycled products

2022 and 2023 currently is witnessing a proliferation of measures relating to limiting single-use plastic, but more generic fiscal measures can also prove effective in fostering positive environmental behaviours. 

To incentivise recycling, the Czech Republic is advocating lower VAT rates for the use of recycled products, with the clear aim of promoting the purchase of recyclable products.  

To this effect, the Czech Republic has issued an application to the European Commission outlining its proposals. 

Notably, a specific potential reduced VAT rate has not yet been touted by the Czech government, indicating that the proposal still requires further definition.   

While the EU Commission has recently afforded Member States significantly increased autonomy to determine VAT rates, the reduced rate category, which can be applied with greater liberty, does not yet extend to products incorporating recyclable content. The proposal is therefore intended to stimulate not only a discussion pertinent to the Czech Republic specifically, but also more widely to other EU Member States, who may find themselves contemplating similar concerns at a future point. 

The Czech Republic’s proposal to the European Commission can be located below: 

pdf (europa.eu) 

The Czech Republic is a compliant territory for Kofax. We will support any new VAT rates confirmed further to this proposal as part of our e-invoicing solution.