VAT on food and drink (foodstuffs)
Food in the hospitality sector is subject to the low VAT rate of 9% in most cases. This is designed to keep the price of basic necessities affordable. Whether a customer eats his meal in your restaurant or picks up the dish makes no difference: both fall under the low rate, as long as it concerns food or non-alcoholic beverages. It is important that you properly distinguish in your records between turnover under 9% and turnover under 21%. This is the only way to avoid errors in your tax return.
VAT rates in the hospitality industry
In the hospitality industry, there are two relevant VAT rates: the low rate of 9% and the high rate of 21%. The 9% rate applies to most food and non-alcoholic beverages, while the 21% rate applies to alcoholic beverages and other services not directly related to food. Below is an overview for each category.
What falls under 9% (low tariff)
The low rate applies to most primary foods and prepared meals. Some key examples:
| Goods / Services | VAT rate |
|---|---|
| Bread | 9% |
| Vegetables | 9% |
| Fruit | 9% |
| Meat | 9% |
| Cuisine (meals) | 9% |
| Coffee / tea | 9% |
| Soft drinks (non-alcoholic) | 9% |
| Beer and beer-based drinks containing up to 0.5% alcohol | 9% |
| Candy & chewing gum | 9% |
| Chocolate | 9% |
| Ice cream (as consumption) | 9% |
| Breakfast | 9% |
What falls under 21% (High rate)
The high rate of 21% applies to alcoholic beverages and non-food products. Examples include:
| Goods / Services | VAT rate |
|---|---|
| Beers (normal) | 21% |
| Wines | 21% |
| Spirits | 21% |
| Accommodation in hotels, B&Bs and guest houses (from 2026) | 21% |
| Non-food items (souvenirs, merchandise) | 21% |
| Stimulants (tobacco, e-cigarettes) | 21% |
Fictional calculation example: A meal costing €109, including 9%, contains €9 VAT. Wine costing €121, including 21%, contains €21 VAT. The bill of €230 consists of €200 turnover and €30 VAT. Calculate per rate using 9/109 or 21/121.
Overnight stays
For overnight stays in hotels, B&Bs and guesthouses are subject to the high VAT rate of 21%. This applies from 1 January 2026. Breakfast falls under 9%, even if you charge an all-inclusive price for accommodation and breakfast: in that case, split the price according to the market values of both services. See the explanation from the tax authorities regarding accommodation and breakfast.
Arrangements
A package is a combination of various services, such as a dinner and overnight stay or an all-inclusive package. You must apply the correct VAT rate to each component. Food and non-alcoholic drinks fall under 9%, whilst alcohol and certain services fall under 21%. Where components are subject to different rates, you must split the payment. Example: the separate market values of accommodation and breakfast are €100 and €20. With a package price of €108 excluding VAT, you allocate €90 to accommodation and €18 to breakfast. The VAT is then €18.90 + €1.62 = €20.52.
Vouchers
For a single-purpose voucher, the VAT consequences are known upon issuance and VAT is then due. For a multi-purpose voucher, VAT arises upon redemption. A dinner voucher is not automatically single-purpose: it depends on what can be paid for with it. Read the explanation about VAT on gift vouchers.
VAT on alcohol
Beer and beer-based mixed drinks containing more than 0.5% alcohol fall under 21%. For other drinks, the limit is more than 1.2%. Up to and including these limits, 9% applies. For mixed drinks in the hospitality sector, there is an option to split the charge if you also sell the drinks separately and the price of the mixed drink is equal to the sum of those individual prices. Check the terms and conditions for drinks and mixed drinks.
VAT in hospitality sector deductible?
Distinguish between your hospitality purchases for resale and food or drink that you, your staff or business relations consume in a hospitality venue. The VAT on the latter is not deductible. The exception for charging on applies if you are not the end user, charge on with VAT and state on the invoice that it concerns food and drink for on-site consumption. Simply including costs in your own rate is therefore not a general carte blanche. Read the conditions for hospitality expenses. For a detailed explanation, you can read further in our article: Is food and drink business deductible?
What should you pay attention to?
As a hospitality entrepreneur, there are a few things you need to be extra alert to. By arranging these properly, you will avoid mistakes and unnecessary discussions with the tax authorities.
- Receipts and invoices: Always state the correct VAT rate on receipts and invoices. This way you keep things clear and avoid problems afterwards.
- Takeaway or on-site dining: Ordinary meals fall under 9% in both cases. Keep alcohol and any other benefits separate.
- VAT return: Make sure your records are clearly broken down by VAT rate. This will make your return easier and reduce the risk of errors.
Check the tariff settings of your till products and reconcile daily totals with the cash register, card machine and accounting. Record the allocation key for packages. Read how to process the amounts in the VAT return.
Frequently Asked Questions
How much VAT on food?
In the hospitality sector, food is generally subject to 9% VAT. The rate is not determined by how luxurious or expensive a dish is. Separate rules apply to drinks, based on the type of drink and its alcohol content.
VAT on drinks?
Coffee, tea and soft drinks are subject to 9% VAT. For beer and beer-based mixed drinks, 21% applies if the alcohol content exceeds 0.5%; for other drinks, if it exceeds 1.2%. Up to and including these limits, the 9% rate applies. For certain mixed drinks in the hospitality sector, you can split the components if you meet the conditions.
VAT on beer?
Beer and beer-based drinks containing more than 0.5% alcohol are subject to 21% VAT. For those containing 0.5% alcohol or less, the rate is 9%; 0.0% beer is therefore also subject to 9%.
Do I have to charge VAT on tips?
No VAT is due on tips for your staff. A sole trader working in the catering industry also does not have to pay VAT on usual tips for themselves. The method of payment, such as cash or card, does not determine this in itself. In other cases, the additionally received amount may form part of the VAT turnover. Therefore, keep tips identifiable and distinguish them from mandatory surcharges. Source: Belastingdienst, Tips and extra remuneration.
