How is the tax calculated for small restaurants
19% or 7% VAT in gastronomy: what applies when?
Opening a snack bar or a café - anyone who intends to do so will come across the question of which sales tax rate has to be paid for individual dishes and drinks at the latest when calculating the prices. 7 percent, the reduced rate for groceries or 19 percent, the regular sales tax rate that counts for services?
Basically: Anyone who serves their guests food at tables or other seating areas charges a sales tax of 19 percent. If, on the other hand, the food is offered at high tables, counters or similar “makeshift consumption devices”, the reduced tax rate of 7 percent applies.
As the operator of a catering business, you have to ensure that the correct rate for all your food and drinks is transferred to the tax office. From a business perspective, you have an interest in selling as much food and drink as possible at the reduced tax rate, as this is good for your sales. The tax office, on the other hand, wants to prove the highest possible non-privileged share in order to have higher tax revenues.
19 percent: The regular sales tax rate in gastronomy
Apart from the exceptions, catering businesses must generally levy the regular sales tax rate of 19 percent. The criterion here is that a “restoration service”, i.e. a service, takes place and no longer “just” food is sold.
That means, wherever individual advice, service, seating and toilets are provided, a kitchen is available, dishes are provided and cleaned - 19 percent VAT is also due there. However, if you also sell your food in take-away, you can charge the reduced 7 percent sales tax for the same dishes.
19 percent are due, for example, in a café that is more than a coffee stand in the park and where the guests can make themselves comfortable in your rooms or in an outdoor seating area.
Even if you offer catering, which includes a comprehensive service in addition to delivery, 19 percent VAT is due.
7 percent: Then the preferential sales tax rate applies
In principle, the tax authorities initially only estimate 7 percent sales tax for unprepared food, e.g. in supermarkets, bakers or butchers. For you as the operator of a snack stand, food truck or café, the reduced tax rate also applies if prepared meals can be sold at the counter and taken away.
If you offer your guests bar tables for consumption on site, but are not served at the table, no dishes and their cleaning are provided and the dishes are prepared as standard, you can charge the reduced 7 percent. Sausages, French fries, a falafel or a slice of pizza that the guest eats without any further service on site or on the go are included, for example.
Beverages: Generally 19 percent, exceptions with 7 percent sales tax
You generally charge 19 percent sales tax for drinks that you sell. It does not matter whether your guests consume them on site and with the associated service or order them to take away. Hot drinks, soft drinks, beer and wine are covered by this regulation.
However, there are exceptions with only 7 percent sales tax. They apply to natural water, milk and mixed milk drinks that contain at least 75 percent milk.
There is a classic example of this distinction with coffee: For a black coffee or with a little milk - whether on site or to go - you charge your customers 19 percent sales tax. On the other hand, you can use the 7 percent with a cappuccino if it contains more than 75 percent milk, prepared in the classic way.
Take into account the various VAT rates when calculating the prices in the business plan for your catering business. Because whether you run a small food stand or a fine specialty restaurant - in both cases, under certain circumstances, you can levy the reduced sales tax rate on your food and drinks.
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