Fiscal subject related
The transaction can be considered a service if the sale of the prepared food and drink is accompanied by appropriate additional services that allow immediate consumption on the spot; for example, dining facilities are provided with tables, chairs, and benches, and these service elements dominate the transaction. The sale of food and drink is therefore only one part of the transaction, in which services predominate.
In the transaction, the provision of services dominates if there is an opportunity for local consumption, and the guest lives with this; that is, he accepts the additional services that enable immediate consumption. However, if it is not possible to eat on-site or the guest asks for the food or drink to be taken away, then product sales dominate the transaction instead of service. That also means that the predominance of service provision can be realized not only in restaurant catering, in conditions typical of restaurant catering, but also, for example, in fast food restaurants, in the so-called "food courts" of shopping centers, where there is usually no service and guests have to take plastic trays and cutlery.
When determining the typical and dominant elements of the transaction, all the circumstances of the hospitality business must be taken into account, because only by evaluating them can it be decided whether the transaction is more of a product sale or more of a service provision. It is not the level of service provision that is decisive, but the service elements related to the given activity. Thus, the application of a reduced VAT rate for local consumption cannot be ruled out, even for services of a less advanced standard compared to restaurant catering. This is also supported by the Court's 2022 ruling, according to which the dominance of service provision cannot be established only in circumstances typical of restaurant catering.
Overall, it can be said that the existence of additional services must always be judged in relation to the nature of the given service. The specific activity must be examined and judged from the point of view of the average consumer.
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