The European Commission has launched a public consultation on possible changes to Value Added Tax (VAT) rules to better support the transition towards a circular economy. Opened on 9 September 2026, the consultation aims to identify how existing tax rules could be adapted to encourage more sustainable business practices, including the reuse and resale of products. 

The consultation focuses on how VAT rules affect second-hand goods and the destruction of products that could still be used. Under the current system, certain VAT rules can make it more financially attractive for businesses to destroy unsold goods rather than donate them. The Commission is examining how these rules could be changed to encourage businesses to keep products in use for longer. 

These changes could be particularly relevant to the textile industry, where large quantities of unsold clothing and other products are discarded each year. By making it more financially attractive to donate or resell these goods, revised VAT rules could help reduce textile waste and support the development of second-hand markets. 

Businesses, trade associations, national authorities and members of the public are invited to submit their views through the European Commission's consultation portal by 4 November 2026. The feedback will contribute to an assessment expected to conclude in early 2027, which could inform future amendments to the EU VAT Directive.