Application of the correct VAT rate for non-alcoholic beverages, juices, and beverages sold by restaurant and catering businesses in Greece

The Greek Tax Agency has issued Circular No. E.2005 clarifying when the usage of the reduced VAT rate for catering services and non-alcoholic beverages is applied and when the regular, i.e., standard VAT rate is applied when it comes to the mentioned services and products. In short, different VAT rates (24% and 13%) apply to non-alcoholic beverages depending on whether they are for on-site consumption or delivered in a package.

The mentioned Circular clarifies that the supply of non-alcoholic beverages, juices, and beverages is now subject to two different VAT rates, i.e., 24% or 13%, depending on whether they are intended for on-site consumption, an act that is characterized as the provision of a restaurant and catering service, or if they are intended to be delivered in a "package," as a result of which the relevant VAT rate for the good is applied each time. Thus, their on-site consumption is subject to the normal VAT rate of 24%, while delivery in a "package" is subject to the reduced VAT rate of 13%.

For example, if a customer orders a juice and consumes it in the store, VAT is charged at 24%; if he gets it packaged to go or delivered, then the VAT rate applied is the reduced rate of 13%.

Also, the reduced VAT rate applies to non-alcoholic beverages and juices used by restaurants and catering establishments, but it does not apply to the sale of water products without added sugar or sweeteners, no matter the way of consumption, i.e., delivered in a "package" or available for immediate consumption on the spot.

Additionally, under the same conditions, the reduced VAT rate applies to businesses that supply prepared or unprepared food and/or drinks but do not support services on-site.