The VAT rate for food in restaurants was reduced to the reduced VAT rate of 7% for an indefinite period from January 1, 2026. However, the reduced tax rate only applies to food and not to drinks. Catering establishments must therefore show what the guest consumes separately according to tax rates in their receipts or invoices.
This separation is generally not possible if the catering business offers a combination of food and drink, such as a brunch, buffet or all-inclusive offer. The tax authorities allow a flat-rate allocation according to which the portion of the charge attributable to the beverages 30% of the all-inclusive price can be applied. With a All-inclusive price for overnight stays with breakfast the fee component, which is to be set at 19%, can be calculated at 15% of the flat rate price as a service flat rate or as a business package.
Consequence: Whenever the proportions of food and beverages cannot be separated when selling at a total price, the beverage proportion can be recognized at a flat rate of 30%.
Practical example for the period from 1.1.2006:
An entrepreneur spends two nights in a hotel while working away from home. The hotel charges him a flat rate of € 120 per overnight stay, which includes breakfast, the use of the parking lot, the use of fitness equipment and the Internet. The hotel may charge as follows:
| Total price (gross) 120,00 € x 2 = | 240,00 € |
| 15% Business Package | - 36,00 € |
| Price for bed and breakfast, excluding drinks | 204,00 € |
| Price share for breakfast | |
| Meal allowance 28 € x 20% = 5.60 € - 1.68 € =) | - 3,92 € |
| (Beverage share: € 5.60 x 30% = € 1.68) | |
| Accommodation costs | 200,08 € |
| Compilation of the service description | |
| Gross overnight stay 7% VAT | 200,08 € |
| Breakfast without drinks gross 7% VAT | 3,92 € |
| Business package (service flat rate) gross 19% VAT | 36,00 € |
| in total: | 240,00 € |
| (the business package includes drinks with breakfast with 5,60 € x 30% = 1,68 € included) |
The all-inclusive price of € 240 is therefore distributed as follows:
| Designation | Gross amount | Net amount | Input tax |
| Overnight stay | 200,08 € | 186,99 € | 13,09 € |
| Breakfast (meals) | 3,92 € | 3,66 € | 0,26 € |
| Breakfast (drinks) | 1,68 € | 1,41 € | 0,27 € |
| Incidental costs | 34,32 € | 20,84 € | 5,48 € |
Note: Ancillary costs can be booked as business expenses if it can be assumed that they do not include any private costs, e.g. for pay TV or massages. The entrepreneur can claim the input tax from the cost of the breakfast as input tax. He posts the costs (net) as a private withdrawal because only the meals allowance may be used for meals.