VAT: 6% on all restaurant and catering services
July 2021 – One of the measures adopted by the federal government to help businesses recover from the Covid-19 crisis is the temporary reduction of VAT to 6% for restaurant and catering services. And this measure goes further than you might think.
Temporary rate cut
The rate reduction was introduced by a Royal Decree of 27 April 2021, published in the Belgian Official Journal of 30 April 2021. This Royal Decree is very succinct, but perfectly clear: "By way of derogation from Article 1, [i.e. normal rate of 21%] restaurant and catering services are subject to the reduced rate of 6 per cent from 8 May 2021 to 30 September 2021 inclusive".
What exactly are the services that benefit from this reduced rate? There are three main groups.
1. The supply of food in restaurants and cafés for consumption on the premises: this was subject to VAT at the rate of 12 per cent, which is now reduced to 6 per cent.
2. The supply of drinks in restaurants and cafés for consumption on the premises. These services were still subject to the standard rate of 21%, but this is now also reduced to 6%. The reduction also explicitly applies to alcoholic beverages, but still for consumption on the premises.
3. The simultaneous supply of food and beverages for consumption on the premises in the course of a single service. Until now, the restaurant owner had to apply the 12% rate to food and the 21% rate to drinks... so this is temporarily no longer necessary. The rate is now 6% for both.
This clearly refers to the supply of services and not the supply of food and drink. The latter do not benefit from this temporary measure. In terms of rates, however, there is not much difference between the two. In most cases, the supply of food is also subject to the 6% rate (with the exception of certain fish and shellfish, such as caviar and lobsters). The supply of drinks is also generally subject to the 6% rate, with the exception of alcoholic drinks.
However, you must distinguish between supplies and services because you must account for and declare them separately for VAT purposes.
The name of the service or provider is not important. Examples include
fast-food and self-service restaurants
restaurants in theatres (clubs, etc.), museums and shopping centres
canteens;
hotels or guest houses with semi or all inclusive;
cafeterias, cafés, bars, brasseries, inns, tea rooms and discos.
But also :
food trucks, snack cars;
caterers, bakeries with a consumption room;
temporary sales or consumption stands at festivals, markets and fairs.
Specialities
Snacks and appetizers intended to be consumed on the spot (think of packets of chips, ice cream, cheese cubes or pre-packaged salami) qualify for the reduced rate of 6%. After 30 September 2021, the rate will be 12%.
(Light) meals (tapas plates, lasagne, sandwiches, salads) can temporarily benefit from the reduced rate, always provided that they are consumed on the premises.
The supply of food or drink by undertakers for consumption on the premises may temporarily benefit from the 6% rate.
The supply of breakfast to guests in furnished accommodation is fully eligible for the reduced rate of 6%. The supply of food and drink in a room by a hotelier to his guests is considered as restaurant service and therefore subject to the 12% rate. However, thanks to this temporary measure, the rate is 6% from 8 May to 30 September 2021.
The cash register system
The application of the reduced VAT rate of 6% to restaurant and catering services requires an adaptation of the programming of the cash register system. When reprogramming, the codes generally used ("A" for 21%, "B" for 12%, "C" for 6% and "D" for 0%) do not need to be adapted. Only the allocation of supplies of goods and services to the different rates needs to be adjusted.
If this is not done immediately, this is not a problem: the administration allows the amount of VAT due to be recalculated afterwards pending reprogramming.
The usual rate of 12% which therefore appears on all notes and receipts can be adapted manually by crossing out the words "12%" and replacing them with "6%". The administration further clarifies that since this is only a temporary measure, there is no need to order new receipt books with a new box for the 6% rate.
