According to the statements of the Prime Minister, António Costa, in Parliament, replacement of VAT in catering to the intermediate rate will only become fully into force in 2017. So, from July 1 this year will force a reduction of VAT, but only for the food and perhaps a few drinks, so most drinks will continue to be taxed at the normal rate.
“given word is the word honorable”
This is the 2nd retreat of government at the level of VAT restoration. It was initially planned that resetting the intermediate rate in the sector occurred in early 2016. However, given the passage of time limits, the draft State Budget for 2016 backed this matter, referring that it would only enter into force in July 2016. Now there is a new setback, with a discrimination between the products that will benefit from VAT descent and those who will keep the maximum rate.
Refer It was found that in one of the televised debates before the parliamentary elections, António Costa had pointed out that the lowering of VAT was right and the phrase ‘promise is honored word “indicating that a year later would do the opposite of what was mentioned in election campaign.
Now, the Prime Minister justify the retreat with the fact that it received information from the AT that the reduction in VAT would have a greater impact to the 350 million that had been estimated.
Descent in 2016 only about feeding
According to the information coming to light , wine, beer, spirits, soft drinks and juices will continue to be taxed at the standard rate (23% on the mainland). Thus, only the food and probably the cafeteria drinks will benefit from the intermediate rate. In Parliament, António Costa supported this measure with a study indicating that 85% of the sector’s transactions correspond to food products, accounting for drinks only 15%, so the decline in VAT will cover the vast majority of situations.
According to AHRESP, the final costume of the covered products will be announced by the Government on 1 March, at the close of the Conference of AHRESP
Restaurants will dribble new rules menus
Several media outlets have realized some strategies of entrepreneurs catering to dribble the new VAT rules . Instead of invoicing the drinks aside, many restaurants prepare to dribble past the normal rate, including any meal in a menu.
At the outset, a menu with drink should be taxed at the standard rate, since the VAT Code states that a product composed of elements subject to various VAT rates is always taxed at the higher rate. However, as the “menu” mention an invoice does not indicate whether it includes a drink, will be easy for restaurants apply the intermediate rate of VAT (13%) instead of the standard rate (23%).
Only one inspection every restaurant, including what each menu contains could detect non-compliance. As such it will be very difficult to achieve, there will be the possibility of widespread tax evasion, ending many of the drinks being effectively taxed at the intermediate rate and the state to not get the expected revenues.
billing systems with multiple VAT rates
If there are two VAT rates in force, will of course be necessary, billing systems are prepared for this purpose. In practice, as will happen in pharmacies where there are drugs with different VAT rates. This enables entrepreneurs restoration must be loaded in the computer systems the correct VAT rate for each product and the invoice submit this distinction. In many cases, this may lead to further updating of computer software, which were recently changed to accommodate the insertion of NIF taxpayers.
It is planned that the draft state budget for 2016 will be presented at the next 6th Tuesday, 5/2, at which point it will know a bit more about the VAT rules of the restoration.