CJEU issues decision on VAT concept regarding ”restaurant and catering services” within a catering area

On 22 April 2021, the Court of Justice of the European Union (CJEU or Court) issued a decision in the Katowicach case (C-703/19) regarding the interpretation of the concept ”restaurant and catering services” for value-added tax (VAT) purposes in the context of a catering area (e.g., a food court in a shopping mall).

According to the Court, a ”catering service” (which may, in principle, be subject to a higher VAT rate than the sale of food and drinks in supermarkets or takeaway outlets) is characterized by a cluster of features and acts, of which the provision of food is only one component and in which services largely predominate. However, when the supply of food is accompanied only by the provision of rudimentary facilities, namely simple consumption counters, without any possibility of sitting down, allowing only a limited number of customers to consume on the premises and in the open air, which requires only negligible human intervention, those elements constitute only minimal support services which are not such as to alter the predominant character of the main service, namely that of a supply of goods (which may, in principle, be subject to a lower VAT rate than catering and restaurant services).

Source EY

See also ECJ VAT C-703/19 (J.K.) – Decision – Clarification of the term ‘restaurant service’ and ‘food’ to which a reduced VAT rate applies

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