In the columns of the Journal du Dimanche, some sixty business leaders, meeting at the initiative of the Impact France Movement, published an opinion piece in which they called for the establishment of a green VAT for environmentally and socially responsible products and services. responsible. “We, business leaders, suggest to parliamentarians and the Ministry of Economy and Finance to look into a solution capable of acting” on purchasing power, business support, and the transition ecological: “the green VAT”, they write. Explanations of the mechanism.
In France, value added tax (VAT), a general tax on consumption, is the main source of tax revenue. Its standard rate is set at 20% for the majority of products and services. But there are exceptions. A reduced rate, set at 10%, is applied in particular to unprocessed agricultural products, catering, firewood and home improvement work. A reduced rate, set at 5.5%, also exists for most food products, feminine hygiene protection products, equipment and services for disabled people, books as well as gas and electricity subscriptions. Finally, a special rate set at 2.1% is reserved for drugs reimbursable by social security. There are also special rates applicable in Corsica and the overseas departments.
The idea of a “green VAT” would thus be to apply a reduced rate to ecologically responsible products and services. “These products and services would be strictly identified by the State and would all have the common denominator of responding to a crucial environmental issue: carbon emissions, waste of resources, plastic pollution, collapse of biodiversity…”, indicate the signatories in the JDD. “A modulation of 10% to 5.5% could also be implemented depending on the company’s social commitments inherent in the design of the product or service”.
Among the signatories from many start-ups gravitating in tech or sustainability are the heads of the Mouvement Impact France, Camif, Backmarket, BlablaCar, Yuka, Le Fourgon, Vestiaire Collective, Le Slip Français and Biocoop.
“It is no longer possible to submit to the same tax rules the companies which aggravate the environmental crisis and those which do everything to provide solutions. We also believe that it is urgent to encourage citizens to collectively turn to virtuous goods and services by making them identifiable and accessible to all”, they write again.
The modulation of VAT on environmental criteria is a avenue regularly proposed. She appeared in the program of several left-wing presidential candidates, including that of PS candidate and current mayor of Paris Anne Hidalgo and MEP Yannick Jadot, EELV candidate.
In terms of VAT, French legislation, like that of the other Member States, is consistent with texts in force at European level. Directives provide that Member States may apply one or two reduced rates (at most), but they regulate the goods and services for which reduced rates are possible.
A recent agreement on new rules governing VAT rates, signed at the end of 2021, has expanded the current list of goods and services eligible for reduced rates. However, it does not mention any reduction for eco-responsible products. This measure should therefore be subject to a VAT reform at European level.
The editors of the forum also mention this aspect: “Given the urgency, we call for this measure to be adopted as soon as the draft finance law for 2023 is the subject of new negotiations at European level” . They believe that “if a modulation of VAT were to be rejected by the government due to legal or budgetary constraints, it is essential that we introduce new tax rules directly linked to the commitments of companies as soon as possible”.
