Different VAT rates for products with the same main ingredient

• Food products with the same main ingredient can be subject to different VAT rates depending on whether they are sold in a store or prepared and served hot for immediate consumption.
• This principle was affirmed by the European Court of Justice in a recent case involving the sale of a milk and chocolate beverage by a coffee chain in Poland.
• The Polish tax authority argued that the sale should be classified as a restaurant service and subject to the 8% VAT rate, rather than the reduced 5% rate for milk-based beverages.
• The court stated that the judge in the case must determine if the products have similar properties, meet the same consumer needs, and if the differences can significantly influence the consumer’s choice to purchase.
• In this specific case, the court highlighted that the beverages sold in the coffee chain are served hot and intended for immediate consumption, while those sold in stores do not have the same level of consumer influence.
• Based on these differences, the court suggested that two different VAT rates could be justified.

Source: eutekne.info

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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