Running a restaurant in Lisbon comes with unique challenges, especially for expat business owners. Understanding and applying the correct VAT (IVA) rates is crucial for compliance and profitability. Entering the wrong VAT information into your Point of Sale system is an easy (and common) error to make, and it can cost you thousands of dollars in profit. At Elevate Accounting, we are dedicated to helping you navigate these complexities, ensuring your business thrives.
VAT Rates in Portugal can be different depending on what type of item is being sold (food versus soft drinks for example), and where it is being consumed (on-premises or take-away)
When the term “on-premises” is used, it means the customer uses the restaurant’s tables, chairs, or other facilities. For restaurant and beverage services consumed on-premises, the VAT rates in Lisbon are as follows:
– Intermediate VAT Rate (13%): This rate applies to most food and non-alcoholic beverages other than soft drinks.
– Maximum VAT Rate (23%): This rate applies to alcoholic beverages and soft drinks.
The VAT treatment for takeaway and delivery services in Lisbon differs from on-premises services:
– Intermediate VAT Rate (13%): Applies to ready-to-eat meals prepared for immediate consumption.
– Reduced VAT Rate (6%): Applies to basic food items listed in Annex I of the VAT Code, such as certain fruits, vegetables, and dairy products.
– Maximum VAT Rate (23%): Applies to items not listed in Annex I or II, like certain pastries and individually sold ready-to-eat snacks.
Here are some practical examples of how VAT rates apply to different products and services in Lisbon:
– Orange Juice: Intermediate rate for on-premises consumption; reduced rate for take-away.
– Milk and Chocolate Milk: Intermediate rate for on-premises consumption; reduced rate for take-away.
– Ice Cream and Savory Snacks: Intermediate rate for on-premises; maximum rate for individual take-away items.
Navigating VAT complexities in Lisbon can be challenging, especially for expat business owners in Portugal. Our team of English-speaking accountants specializes in supporting expat business owners, ensuring your accounting is completed promptly, and your questions are answered clearly. Our goal is to make your life easier while helping you earn more money.
Understanding and applying the correct VAT rates is crucial for compliance and profitability. At Elevate Accounting, we provide expert guidance and comprehensive bookkeeping services tailored to expat business owners in Lisbon. Contact us today to simplify your financial management and maximize your business potential.
Contact us today for a free consultation and let us show you how Elevate will help you take your business to the next level.