This paper - Making Cycling Circular: The case of Swapfiets - details how both the tax landscape and traditional practices of accounting restrict the financial viability of circular Product-as-a-Service businesses. Taking the case of bicycle provider Swapfiets, the paper highlights that under current legislation, PaaS businesses are required to pay more VAT over the lifetime of a product than their linear counterparts, and that strict eligibility criteria prevents them from applying the reduced rate of VAT. It also determines the pitfalls of basing asset financing conditions on an assumption of linear depreciation, which we know to be inaccurate in PaaS models that engage in regular repair and maintenance. This publication determines that to navigate this issues businesses are incentivised to renege some of their circular ambitions, and so legislative change and new financing norms are recommended instead.
You can also find the Dutch version of this report on the Insights page of ABN AMRO Bank.