Report on simpler VAT rules for sales of second-hand goods and donations of food
The Swedish government has received a report titled “Simpler VAT rules for the sale of second-hand goods and donation of food”, proposing VAT reforms to simplify taxation and encourage food donations. The report is pushing for July 2026 food donation reforms; and January 2027 for a profit margin taxation.
This can be seen in EU Greening VAT plans following the adoption EU VAT reforms after ViDA plan. There are some quick wins, including harmonisation of VAT on charitable donations to help the circular economy.
Adapting VAT rules to promote donations and secondhand goods
The report suggests expanding the simplified profit margin taxation scheme for second-hand goods, applying it to items costing up to SEK 10,000 to reduce administrative burdens. For food donations, it recommends a VAT exemption for donations to approved charitable organizations. These changes could cut public revenue by SEK 72.8 million annually but aim to improve efficiency and social welfare by supporting second-hand trade and food redistribution.
The task of the investigation is to investigate whether the VAT rules for gifts and sales of second-hand goods can be simplified and made more predictable in order to, among other things, reduce the administrative burden for the companies concerned. Simple and predictable rules for gifts and sales of second-hand goods can contribute to products being used in a more efficient and sustainable way.
By simplifying the VAT rules for companies that sell second-hand goods, a more sustainable use of products that are suitable for reuse can be promoted. The investigation will therefore, among other things, consider whether the provisions on simplified profit margin taxation can be designed in a way that facilitates the sale of used goods that are suitable for reuse.
In addition, the VAT rules should facilitate the use of already produced goods when possible, for example by donating goods that would otherwise be discarded to charity instead. The inquiry will therefore, among other things, consider whether the regulations on withholding tax can be designed so that the VAT consequences of companies donating goods to aid organisations and the like become more predictable, thereby increasing incentives to donate goods.
The inquiry’s mission also includes analysing and considering the effects that changed rules may have on administrative burden and resource use, and considering how the risk of errors and fraud should be countered. If deemed possible and appropriate, the inquiry will submit the necessary legislative proposals.
