News

E 2005/2024

Subject: Provision of additional clarifications regarding the application of a reduced VAT rate in the focus

CIRCULAR SUMMARY

A) SUBJECT

Circular regarding the provision of additional clarifications regarding the application of the correct VAT rate when delivering non-alcoholic beverages, juices and beverages from businesses restaurant and catering.

B) CONTENT

With this circular, clarifications and instructions are provided in order for catering businesses as well as businesses related to them to apply the correct VAT rate to the delivery of non-alcoholic beverages, juices and beverages to their customers in the event that these goods are not are part of an overall on-site catering service provision.

C) SCOPE

This circular concerns all taxable persons who are active in the field of general catering services and consumers of non-alcoholic beverages, juices and beverages.

On the occasion of questions brought to the attention of our Service after the issue of no. E.2002/2024 (ADA: 6ΕΘΔ46ΜΠ3Z-9ΨΜ) of the circular of the Governor of AADE, the following additional clarifications are provided for the correct and uniform application of paragraph 6 of Chapter B "SERVICES" of Annex III of the VAT Code . (law 2859/2000 (A'248)), as applicable after its replacement by law 5073/2023 (A' 204):

1. Paragraph 9 of article 53 of law 5073/2023 replaced the par. 6 of Chapter B "SERVICES" of Annex III of the VAT Code. with the result that, from 1.1.2024, the distribution of alcoholic and non-alcoholic beverages, juices and beverages from businesses operating coffee shops, coffee shops, patisseries, restaurants, steakhouses, wineries and other related businesses, with the exception of entertainment centers, will now be subject to standard VAT rate. Exceptionally, the supply of coffee, cocoa, tea, chamomile and other infusions is still subject to a reduced VAT rate until 30.6.2024, regardless of whether they are consumed locally or delivered in a "package".

2. Detailed instructions and clarifications for the implementation of the above provision were given with the no. E.2002/2024 circular of the Governor of AADE.

3. As a consequence of the above, the supply of non-alcoholic beverages, juices and beverages is now subject to two different VAT rates, i.e. 24% or 13%, depending on whether they are intended for on-site consumption, an act which is characterized as the provision of a restaurant and catering service or if they are intended to be delivered in a "package" with the result that the relevant VAT rate for the good is applied each time as defined in Chapter A "GOOD" of Annex III of the VAT Code.

4. With par. 1 of article 6 of Executive Regulation (EU) no. 282/2011 of the Council of 15 March 2011 on the adoption of implementing measures for Directive 2006/112/EC on the common system of value added tax are defined as restaurant and catering services, "services consisting in the delivery of prepared or unprepared food or beverages or of both, for human consumption, accompanied by adequate support services enabling their immediate consumption. The provision of food or drink or both is only one element of the whole in which services excel. [...]".
Furthermore, with par. 2 of this it is defined that "the supply of prepared or unprepared food or drinks or both, including or not their transportation but without any other supporting service is not considered a restaurant or catering service within the meaning of paragraph 1".

5. As it has been clarified (indicative POL.1170/2011, POL.1189/2013), as support services sufficient to enable on-site consumption of the offered items in the premises of cafes, patisseries, restaurants, grills, wineries and related businesses, such as pizzerias, delis, fast food restaurants, soft drinks, snack bars, milk shops and other stores selling food items for on-site consumption, such as loukumados, bougatsa and all kinds of pies, ice creams, etc. is the sale of tableware and other equipment, the serving service, the cleaning of the space and the tables, etc.
It is essentially the provision of meals or meals or food and drinks in general, where the "service" takes precedence, which aims to make immediate on-site consumption more enjoyable in a suitable environment, while food delivery is only one of the criteria for choosing the business by the customer.

6. In addition, according to the CJEU, other elements that are taken into account for our characterization of an act as a restaurant or catering service are the provision of services consisting, in particular, in the transmission of orders to the kitchen, the existence of enclosed and heated areas intended specifically for the consumption of food or even the existence of a cloakroom or toilet (see decision C-703/19 and the case law cited there).

7. On the contrary, in case of delivery of ready-made food or other items as a "package" for consumption outside the store, regardless of whether the "package" is received by the customer himself (take away) or sent by the company to the person indicated by the customer place (delivery), it is an act of delivery of goods and not the provision of a service, as no additional services are provided by the company for their immediate on-site consumption (see also POL.1189/2013).
Consequently, in this case, the VAT rate applicable to each item is applied. As regards the delivery of non-alcoholic beverages, juices and beverages in a "package" (take away or delivery), the relevant VAT rate of Chapter A "GOODS" of Annex III of the VAT Code is applied each time.
The above applies regardless of whether the "package" is sent to the customer by the taxable person himself or through a third party (e.g. companies that manage food distribution platforms).

8. When the supply of food is accompanied only by the provision of rudimentary infrastructure, this element is merely an ancillary supply of limited importance, which cannot, by its very nature, change the predominant character of the main supply which consists in the delivery of goods (see related case C-703/19 and the jurisprudence mentioned there). For example, in the case of the sale of food and drinks by a refreshment shop which has, for a limited number of customers, simple counters around which the customers can stand, for a limited time, to consume the items they have purchased, without the provision of any other service focus, the VAT rate corresponding to each good is applied, based on Chapter A' of Annex III of the VAT Code.

9. In the case of catering businesses, such as, for example, shooting clubs, fast food restaurants, refreshment rooms, snack bars, which may provide food, including non-alcoholic beverages, juices and beverages, to their customers both for on-site consumption within the store as well as as a "package", for the application of the correct VAT rate, the subjective perception of each consumer should also be taken into account. In particular, when the consumer chooses not to take advantage of the material means and human resources made available by the restaurant or catering business, i.e. their existence is not of decisive importance for the specific consumer, the supply of food or drinks cannot considered to be accompanied by some related support service and therefore characterized as delivery of goods.
Therefore, where such businesses supply non-alcoholic beverages, juices and beverages to customers who do not intend to make use of the relevant support services provided by the business, the relevant VAT rate applicable to the good will apply.
It is noted that the will of each customer is not sufficient in itself to give an act the character of the delivery of goods or the provision of a service, but it must also be implemented in practice.

10. Finally, it is clarified that water, natural or artificial mineral, carbonated or not, without added sugar or other sweeteners nor flavored, of tariff class DK 2201 is not included in the non-alcoholic beverages of DK 2202, and is therefore subject to the reduced rate VAT is either delivered in a "package" or available for immediate on-site consumption.