Food and beverage
Tax, cost and documentation in food and beverage
In a food business, profit is lost in cost control rather than menu pricing. Add two different VAT rates on the same bill and heavy staff turnover, and the arrangements have to be set up properly from the start.
Value added tax
Two rates on one bill
Food and beverage services and alcoholic drinks are taxed at different rates; this is an obligation, not a choice.| Item | Rate |
|---|---|
| Food and beverage services | Reduced rate (10%) |
| Alcoholic drinks served | General rate (20%) |
| Takeaway and delivery | Assessed according to the nature of the supply |
The amount for alcoholic drinks must be shown separately on the invoice or equivalent document and taxed at its own rate. Rate lists can change by Presidential Decision and should be confirmed at the start of the year.
Documents
Bills and cash registers
- Where table service is provided, a bill must be raised and must support the document given to the customer.
- Use of a new-generation cash register is mandatory for businesses within scope.
- Reconciling the device against bank takings daily removes the difference most often questioned.
- Meal card and online ordering platform takings are tracked separately; platform commission is an expense and the gross amount is revenue.
- Whether a tip is business revenue or staff income depends on the practice and must be separated accordingly.
Cost
Wastage, portions and stock
- 01
Recipes and portion cost
A standard recipe is written for each item. Cost is managed by controlling the recipe, not the menu price.
- 02
Wastage rate
Preparation and cooking losses are measured and recorded. Without a set wastage rate, stock counts never reconcile to the records.
- 03
Periodic counts
Without a month-end count the profit figure is guesswork. A counting difference is the first sign of leakage.
- 04
Supplier reconciliation
An invoice that does not arrive during the month leaves costs understated and profit overstated, and tax is overpaid.
Staff
Payroll with high turnover
- The employment notification must be filed before work starts; delay brings an administrative fine.
- Part-time and on-call working requires a written contract.
- Weekly rest, overtime and night working pay are calculated separately.
- With high turnover, measuring the severance and notice liability periodically avoids surprises at year end.
- Benefits such as meals and accommodation provided to staff must be reflected in payroll.
Frequently asked
Must drinks and food be shown separately on the bill?
Yes. The amount for alcoholic drinks must be shown separately and taxed at its own rate. Applying a single rate is not an option.
How are meal card and platform takings recorded?
The gross amount collected from the customer is revenue; the platform's commission is a separate expense. Recording the net receipt as revenue understates turnover and leaves the expense document out of the records.
What if I do not count stock?
The profit figure will not reflect reality. Understated cost means overpaid tax; overstated cost leaves a difference you cannot explain. A month-end count is a matter of running the business, not just accounting.
Are tips taxable?
It depends on the practice. Amounts added to the bill and collected by the business are treated differently from amounts left directly with staff. Decide which applies in your business and set up the arrangement accordingly.
This page is general information based on the legislation in force at the time of writing. Rates and amounts change. Talk to us before applying it to your own situation.
Other guides
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Let us talk about your own position
The guides give the general framework. Let us work out which rule applies to your specific facts.