# European Commission VAT reform proposals

> Live situation record from CLSTR: https://clstr.news/situations/european-commission-vat-reform-proposals
> Updated: 2026-09-21T09:24:45.000Z. Sources: 5. Developments: 2.

The European Commission has initiated public consultations to reform the EU VAT directive, intending to utilize tax policy as a tool to support the circular economy and decarbonization. The proposal aims to address regulatory hurdles that currently make repairing, refurbishing, or reselling goods less profitable than purchasing new products.

The reform focuses on three primary areas: the second-hand goods market (including electronics, furniture, and clothing), the management of unsold stock, and company vehicles. Regarding transportation, the Commission is evaluating potential restrictions on VAT deductions for conventional internal combustion engine cars to incentivize the transition to zero-emission models. By simplifying these rules, the EU seeks to reduce dependency on raw materials while enhancing economic security and competitiveness.

## Timeline

### 2026-09-21: European Commission proposes VAT reforms to support circular economy

The European Commission is consulting on VAT rule reforms to support the circular economy and encourage product repair, refurbishment, and resale over disposal.

3 sources. https://clstr.news/cluster/european-commission-proposes-vat-reforms-to-support-circular-economy-1

### 2026-09-14: European Commission proposes VAT reforms to support circular economy

The European Commission is consulting on VAT reforms to support the circular economy and decarbonization, including potential restrictions on VAT deductions for internal combustion engine company cars.

2 sources. https://clstr.news/cluster/european-commission-proposes-vat-reforms-to-support-circular-economy

---
Cite as: European Commission VAT reform proposals. CLSTR, https://clstr.news/situations/european-commission-vat-reform-proposals