The Tax Authority (AT) has published Circular Letter no 25019 dated 17 January 2024, which provides Circular Letter no 25018 dated 10 January 2024. Circular Letter no 25018 imposed a single VAT rate of 23% on menus that include soft drinks or alcoholic beverages, regardless of the different tax rates applicable to these products.

The new Circular Letter clarifies the following points:

  1. Item 3.1 of List II, attached to the VAT Code, allows food and beverage services to include supplies subject to different tax rates. Therefore, when alcoholic beverages or soft drinks are provided along with the food and beverage services (such as a dish, dessert, juice, coffee, etc.), the alcoholic beverages will be subject to the intermediate rate and the soft drinks to the standard rate.
  2. In cases where a single overall price is established for the supply of food and drink (e.g., menu, buffet, or events that include food and drink service) and alcoholic beverages and/or soft drinks are included, the following rules apply:

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  • If the invoice discriminates the services covered by the intermediate rate (e.g., dish, dessert, juice, coffee, etc.) and for alcoholic beverages or soft drinks, the services covered by the intermediate rate will be taxed at that rate, while the alcoholic beverages or soft drinks will be taxed at the standard rate.
  • If a single price is indicated without a breakdown of the different tax rates, and the price includes items taxed at different rates, the normal tax rate (23%) will be applicable.