Recent Clarifications
A ruling published in the BOFiP on 17 September 2025 provides important clarifications on the VAT rates applicable to household waste collection and treatment services. These services are often complex, and determining the correct VAT can be challenging, especially for mixed operations.
The ruling confirms that the reduced 5.5% rate applies to:
- Services directly involved in separate collection, sorting, and material recovery of waste.
- Any services that support these operations.
Other collection and treatment services, along with ancillary services not covered by the 5.5% rate, are subject to the 10% reduced rate.
Related services, including waste transport, storage, or maintenance of recovery equipment, usually follow the VAT rate of the main service, provided that supplies or spare parts do not exceed 50% of the total cost. If this threshold is exceeded, the supplies are treated as separate deliveries and subject to the standard 20% rate.
Finally, VAT on the transport of compost or waste depends on its connection to the main operation:
- If it is ancillary, it follows the main service rate.
- If it is provided as a separate service, the standard 20% rate applies.
This ruling provides local authorities and service providers with a clear framework for correctly applying VAT to household waste management services, ensuring compliance and reducing uncertainty.
