CRNI’s position for European Commission consultation on VAT and the circular economy

Community Resources Network Ireland (CRNI) has submitted a response to the European Commission’s public consultation on VAT and the circular economy, feeding into the position of our European network, RREUSE.

The EU VAT Directive was designed for linear supply chains. It treats reuse, repair and donation less favourably than buying new, and in some cases favours destruction. CRNI’s submission, informed by input from members working in bike repair, textile reuse and reusable products, argues that reform must work for social enterprises whose stock is donated or recovered, not just for commercial second-hand dealers.

Among other recommendations, CRNI’s submission calls for:

• A zero rate of VAT on reuse and repair carried out by recognised social enterprises (a zero rate rather than an exemption, so input VAT stays recoverable), and a reduced rate for repair, upcycling and reuse services, second-hand goods and parts, and repair training;
• Any replacement for the margin scheme to address donated and recovered stock, for example through a notional credit on the value of donated goods;
• Removal of the VAT deduction for viable goods that are intentionally destroyed, with exemptions for unsafe, expired, recalled or hazardous goods;
• Harmonised VAT relief for donations that extends beyond registered charities to recognised social enterprises;
• An expanded small-gifts exemption, with conditions: goods must be fit for reuse, recipients must be free to decline, and relief must not replace producers’ duties to prevent surplus;
• A harmonised definition of second-hand goods that covers repaired and refurbished goods, reused parts and recovered materials that are upcycled into new products;
• Simple, free digital record-keeping so small organisations are not burdened.

This builds on RREUSE’s work and position.

Read CRNI’s full submission here.

• November 9, 2026