The Ministry of Public Finance recently published order no. 3659/2018 (hereinafter referred to as “the Order”) to clarify application of the 5% reduced VAT rate for restaurant and catering services in force since 1 November 2018.
The Order refers to the definition of restaurant and catering activities both in the Council Implementing Regulation (EU) no. 282/2011 dated 15 March 2011, laying down implementing measures for Directive 2006/112/EC on the common system of value added tax, and in the Norms for the application of the Fiscal Code’s Title VII.
The Order also uses several essential elements of Court of Justice of the European Union (hereinafter referred to as “the CJEU”) jurisprudence based on which operations involving the supply of food and / or drinks qualify as supplies of goods (subject to the 9% or 19% VAT rate) or as supplies of restaurant and catering services. The Order mentions some distinctive features of supplies of restaurant and catering services, including: the supply of a proper setting and furniture for serving food, the supply of serving / counseling staff, the supply of crockery / cutlery.
Based on the criteria specific to supplies of restaurant and catering services, the Order also includes several examples of various public alimentation categories and the applicable VAT rate.
Taxpayers involved in restaurant and catering activities need to decide which VAT rate to use (5%, 9% or 19%). To do so, they should analyse whether the conditions covered in CJEU jurisprudence (cases C-231/94 - Faaborg-Gelting Linien v Finanzamt Flensburg, C-497/09 Manfred Bog, C-499/09 CinemaxX Entertainment GmbH & Co. K, C-501/09 Lothar Lohmeyer and C-502/09 Fleischerei Nier GmbH & Co. KG) and local legislation are applicable in their specific situations.
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