The Supreme Court It has been stated that a beer or glass of wine with lunch or dinner is not subject to the reduced VAT rate (9%) as part of the meal.
VAT rate
The general rule is that all services provided in the Netherlands by businesses are subject to VAT at the standard rate (21%). However, as with any general tax rule, there are exceptions in this case too. One such exception is that the reduced rate applies to a (considerable) number of specified services. Since 1 January 2019, this rate has been: 9% (previously: 6%).
One of the services to which the reduced rate applies is: the supply of food for consumption on the premises in the context of hotel, café, restaurant, guesthouse and related businesses. The definition of the term ‘foodstuffs’ states that this does not include alcoholic drinks.
Mixed results
Where a single supply is made, it is generally straightforward to determine which VAT rate applies. In the case of mixed supplies, this is more difficult.
The trader in the case brought before the Supreme Court argued that he provides a single restaurant service, consisting of the supply of food and drink. According to the business owner, the supply of (alcoholic) drinks is included in the restaurant service, meaning that the total is subject to VAT at the reduced rate.
The Supreme Court has confirmed the conclusion previously reached by the Court of Appeal. This conclusion is that, even if the trader’s argument is correct, it is permissible to exclude the supply of alcoholic beverages from the application of the reduced VAT rate. The Netherlands has incorporated this exception into its VAT legislation in full compliance with European VAT rules. The supply of alcoholic beverages is therefore always subject to VAT at the standard rate.