Instead of a tax rate of 20%, 9 percent VAT will be paid by traders in the following categories:
1. accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and rental of places for camping sites or caravans;
2. delivery of books on physical media or by electronic means or both (including textbooks, reference books and study sets, children's picture books, for drawing or coloring, printed or handwritten musical editions), other than publications which are entirely or principally intended for advertising, and other than publications which are wholly or mainly composed of video or audio-music content;
3. restaurant and catering services, which consist in delivery of prepared or unprepared food; this does not apply to restaurant and catering services, which consist of the supply of beer, wine and spirits;
4. foods suitable for babies or young children;
5. baby diapers and similar baby hygiene items;
"Restaurant services" means services consisting of the delivery on the premises of a supplier of prepared or uncooked food and / or beverages for human consumption, followed by sufficient support services to enable their immediate consumption.
"Catering services" are a set of actions in which services predominate and in which the supply of food and / or beverages is only one component. The predominant services are mainly the same as restaurant services, but the delivery is made outside the supplier's premises.
When providing customers with food for consumption, it should be assessed whether in view of the application of the reduced rate under Art. 66 of the VAT Act there is a delivery of goods - food, or there is a delivery of a service (restaurant or catering). This distinction is particularly important as it determines whether a rate of 9 per cent is applicable to the supply in question or whether it should be taxed at the standard rate of 20 per cent.
The term "food" should be understood in the sense of Art. 2 of Regulation №178/2002, namely: drink, chewing gum and any substance, including water, intentionally incorporated into the food during its manufacture, preparation or treatment.
"Food" shall not include:
(b) live animals unless they are prepared for placing on the market for human consumption;
(c) plants prior to harvesting;
(d) medicinal products;
(f) tobacco and tobacco products;
(g) narcotic or psychotropic substances;
(h) residues and contaminants.
The reduced rate of nine percent for the above goods applies to their supplies, imports and intra-community acquisitions in the country (by argument to the contrary of Article 66, paragraph 1 of the VAT Act).
It is necessary to analyze the business model before starting an activity in order to determine the applicable tax rate for a business.
If you have difficulty determining whether your business falls within the sectors covered by the changes, do not hesitate to contact us - your online legal advisor!
The full opinion of the NRA on the application of the new provisions for reduced tax rates can be found at the NRA's website.
You can learn more about legality as a critical success factor in the positive user experience here.
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