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Reduced VAT for food, social services, hotels goes into effect as of May 20

Greece’s Independent Public Revenues Authority has issued a circular with regards to the new decreased Value Added Tax that goes into effect as of Monday, May 20, 2019. The circular analytically describes the sectors affected by the decreased V.A.T. It affects hundreds of food items, catering services but also hotels and social facilities.

Supermarkets and other food selling or offering businesses have to adjust their price lists and cash registers as of Monday. However, big supermarkets have been reportedly belated in adjusting their prices with owners assuring that consumers may not see the decreased prices on the shelves but the reduction will take place at the cash register. “By next Thursday, the procedure will be completed,” the director of a big supermarket told state broadcaster ERT TV on Monday morning.

According to the circular:

– the old reduced VAT rate of 13% remains for basic commodities such as bread, milk, fish, meat, olive oil, cheese, pasta, flour, cereals, vegetables, water, live animals, products for disabled people. Note that “luxury” milk like “almond milk” will be sold at 24% VAT rate.

– old VAT rate of 6% of medicines and books.

– new reduced VAT rate reduced from 24% to 13% affects: all kinds of pasta and bread, fish and crustaceans, coffee, tea, fruit juices and vegetables, salt, vinegar, various food items based on cereals, flours, starches, and food items for the preparation of sauces, broth and soups.

– new VAT reduced form 13% to 6% for electricity, natural gas and district heating (district heating).

Services

The reduced VAT at 13% extends to services provided among others:

-by retirement homes, to services provided by boarding houses, structures for the disabled and structures providing accommodation for people with mental issues, mental disorders and users of drug substances.

-by cafes, patisseries, restaurants, grills, groceries and other businesses related thereto, excluding entertainment facilities. Exempted from reduced VAT is the sale of alcoholic and non-alcoholic beverages, juices and beverages.

Natural or mineral water remains at the VAT rate of 13%.

Hotels

The issue of V.A.T. reduced or not is kind of complicated when food items are offered by hotels.

Accommodation offered with breakfast at 13%.

Accommodation with half-board: 10% of the price is at VAT rate of 24% due to alcoholic and non-alcoholic drinks.

Accommodation with full board -breakfast, lunch, dinner: 15% of the price is at 24% VAT rate due to above mentioned services.

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