Comprehensive restaurant service - taxation


Drink and meal and the VAT rate

It should be noted that the domestic VAT regulations do not use the concept of restaurant services, but refer to the concept of catering services, which is a concept broader than the restaurant service (as it also includes, inter alia, catering services). Catering services are classified in the grouping of 56 PKWIU. Restaurant services including the release of the product for consumption on the spot and the performance of a number of additional activities should be classified as catering services within the meaning of the PKWiU.

Currently, pursuant to Art. 41 sec. 1 of the VAT Act, the basic VAT rate is 23%. The legislator, however, provided for lower tax rates for some goods and services, i.e. 8%, 5%, 0%, as well as tax exemption.

From item 7 of Annex 1 to the Regulation of the Minister of Finance of 23 December 2013 on goods and services for which the VAT rate is lowered and the conditions for applying reduced rates, it follows that the reduced rate does not apply to catering services, under which the sale takes place:

  • alcoholic beverages with an alcohol content above 1.2%,
  • alcoholic beverages which are a mixture of beer and non-alcoholic beverages with an alcohol content exceeding 0.5%,
  • beverages for the preparation of which coffee or tea infusions are used, regardless of the percentage of this infusion in the prepared drink,
  • carbonated soft drinks,
  • mineral waters,
  • other unprocessed goods taxed at the standard rate.

So far, in practice, this meant that the restaurant service could be taxed with two different rates of VAT, i.e. both the basic and the reduced rate. Meals were taxed at a rate of 8%, while coffee, tea, carbonated drinks, etc. were taxed at a rate of 23%, then the receipt or invoice showed two rates of VAT.

Comprehensive restaurant service - i.e. a higher VAT rate

The hitherto approach of the tax authorities regarding the principles of settling VAT under taxation, however, was changed by the Minister of Finance.

Currently, when ordering a meal with a drink, we should pay an increased VAT rate for the whole (and not only for the drink - as before), i.e. 23%. The exception will be when we order only food - then we will pay 8% VAT on the price of the meal. Thus, it is not possible to use a different VAT rate for meals and a different one for drinks within the framework of the restaurant service.

The Minister of Finance argues that the restaurant service is a homogeneous service and is subject to uniform taxation. In the individual ruling of December 19, 2014, No. 13-2 / BH) we read:

(...) If several supplies are treated as a comprehensive supply precisely because their separation would be artificial and economically irrational, then dividing such a comprehensive supply into a service and supply of goods, and additionally taxing them with different rates of VAT should be considered an artificial activity and economically ineffective (...).

Additionally, the Minister of Finance indicated that the provision referring to the scope of exclusion from the application of the reduced VAT rate did not use the term "delivery" but "sale" - which, in the Minister's opinion, covers both the delivery of goods and the service.

According to him, therefore, the restaurant service which includes the supply of the product is, in principle, fully taxed at the 8% rate of VAT. However, in a situation where this service includes the supply of a food or drink listed in item 7 of the Annex to the Regulation of the Minister of Finance, it is fully taxed at the standard rate (23%).

A similar decision in this case was included by the Minister of Finance in another individual ruling of January 9, 2015, no. IPPP2 / 443-389 / 14-4 / MM)

Moreover, such an interpretation of the provisions was also confirmed by the Provincial Administrative Court in Kraków in two judgments of March 17, 2015 (file reference number I SA / Kr 80/15 and I SA / Kr 81/15). The judgment confirms the interpretations of the Minister of Finance: January 9, 2015 (No. PT8 / 033/98/608 / PBD / 14) and December 19, 2014 (No. PT8 / 033/60/401 / WCH / 14 / RD118732).