The European Commission has launched a public consultation on how EU VAT rules can be better aligned with the circular economy. Bitkom expressly welcomes this initiative, as refurbishing and professionally reselling ICT devices extends their lifespan and conserves raw materials. However, current VAT rules place considerable obstacles in the way of such business models. Under the margin scheme, for instance, companies have to match the purchase and resale price of every single device. In addition, donating functional goods is often more expensive in VAT terms than destroying them. As an industry association, Bitkom therefore calls for harmonised definitions of second-hand and refurbished products and a simplified margin scheme that allows calculations at portfolio level. Member States should also be able to apply reduced VAT rates to the repair of ICT devices and to refurbished devices.
