Amazon claims EU Vat rules are preventing items from being donated to charity

A briefing note from Amazon to Ms Boylan said the company’s new fulfillment centre in Baldonnel aims to be net zero and that Amazon has invested in three new windfarms which will power 185,000 Irish homes.

Unpurchased usable products can’t be donated to charity by sellers because of EU rules on Vat, Amazon has claimed.

Lynn Boylan’s Dumping New Products Bill 2022 passed the Seanad this week after Government opted not to oppose it. The bill would enable the Government to ban dumping of any usable products and fine those who do. Ms Boylan said the Government’s Circular Economy Bill had 30 of its 70 pages focused on tackling littering by individuals and is a “missed opportunity”.

She said figures from France suggest 2.3% of all furniture on the French market is not sold, of which 46% is destroyed or recycled.

To extrapolate from those figures to Ireland on a per capita basis, that is around 1,097 microwaves or 1,567 kettles, which would bring about savings of 279 tonnes of carbon dioxide per year. She said exposes had shown Amazon is “one of the biggest offenders in regard to this practice” and is dumping “around a billion items a year”.

A briefing note from Amazon to Ms Boylan said the company’s new fulfillment centre in Baldonnel aims to be net zero and that Amazon has invested in three new windfarms which will power 185,000 Irish homes.

“Donations in kind are an important approach to keep unsold products in the goods cycle. We also help the businesses selling in our store donate their unsold products through Fulfilment by Amazon (FBA) Donations.”

It says this scheme has donated 100m items.

However, the document says while Amazon pays Vat on its donated products, this can often be difficult for small and medium-sized enterprises which sell products through it. The default position under the EU Vat Directive is sellers are required to account for Vat on the cost of excess inventory donated to charity, it adds.

“As a result, it is generally not economically viable for businesses to donate goods in the EU, especially for the tens of thousands of small and medium-sized businesses that sell their products cross-border into the EU consumer market. We believe the solution is the introduction of an EU-wide Vat relief for donations of a wide range of products to eligible charities, either in the form of a 0% VAT rate or a zero-valuation of the donated goods.”

An Amazon spokesperson said the company has “designed our systems to maximise use and reuse, and minimise waste”.

“Our priority is to resell, donate or recycle these items in that order of priority. If a product can have a useful purpose, we want it to be used. Some products cannot be sold, resold, or donated....in this case, our priority is to recycle them.”