VAT: a set menu with a glass of wine is not taxed at 10%

“Restaurants are 10%.”

True for food. Not true for alcohol, and the difficulty begins exactly where the two meet: in a fixed-price menu that includes a glass of wine.

The three rates, in the order you meet them

• 10% — sales for consumption on the premises: food and non-alcoholic drinks. And, since 2012, takeaway or delivery of food prepared for immediate consumption.
• 20% — all alcoholic drinks, no exception and no distinction: on the premises, takeaway, delivered. A glass of wine at the bar and a bottle sold to take away fall under the same rate.
• 5.5% — food intended for deferred consumption, that is, packaged in containers allowing it to be kept. Bread, a terrine in a jar, a vacuum-packed dish to reheat at home.

So the dividing line between 10% and 5.5% is not “eat in or take away”: it is immediate or deferred.

The trap: the fixed-price menu

You sell a €32 menu with a starter, a main, a dessert and a glass of wine. The customer pays a single price. But that price covers two operations taxed differently.

So it has to be split. And the burden of that split is yours: the authorities expect an economically rational method that you are able to justify.

The method, on a €32 menu

The tax administration's own guidance gives an acceptable method where the items in the menu are also sold à la carte: you work out the share of the à la carte price that falls under the reduced rate, and apply that ratio to the menu price.

Take this carte:

The reduced-rate share is €35.45 out of €40.45, that is 87.64%. The 20% share is therefore 12.36%.

Apply those proportions to the menu:

Menu price incl. VAT: €32.00

Base at 10%: €25.21 → VAT €2.52 Base at 20%: €3.56 → VAT €0.71

Total VAT: €3.23

Two points on the method:

• The split is assessed menu by menu. A single flat method for all menus containing alcohol is accepted, provided the proportion of alcohol is similar from one to the next.
• If your items are not sold separately à la carte, the method above does not apply as it stands. You have to build another one — and be able to explain it.

The other places it comes up

• Coffee. A non-alcoholic drink: 10% on the premises, and 10% takeaway since it is for immediate consumption.
• A bottle sold to take away. 20%, as by the glass. Alcohol knows no reduced rate.
• Bread, jars, vacuum-packed dishes sold for later: 5.5%, because consumption is deferred.
• The same hot dish to take away: 10%, because it is not.
• Lunch deals with a drink: the same trap as the evening menu, only more often.

The link with no-shows that nobody makes

Here is a point worth a meeting with your accountant, and it follows directly from what you write in your terms.

• Arrhes kept after a customer backs out are in the nature of flat-rate compensation for withdrawal: they make good a loss, they pay for no service. As such they are outside the scope of VAT.
• An acompte is a first payment against the price of a future operation. It is within the scope, and VAT becomes chargeable as soon as it is received.

→ No-shows: what they cost, and what actually reduces them

What to check yourself

• Your current splitting method. Does it exist? Can anyone explain it? If the answer is no twice, that is this week's job.
• Your deals and set menus that include an alcoholic drink, lunch offers and group deals included.
• How your cancellation terms are drafted: arrhes or acompte.
• And above all, your accountant. This article gives the framework and the order of magnitude; it does not replace someone with your invoices in front of them. That is an hour's appointment against several thousand euros of possible reassessment.