The European Court of Justice joined a couple of cases that were brought before them – see here for the ruling.
The question was in essence whether food stalls, carts etc. supply a service or a good. And if they supply a good, might the reduced rate for food be applicable? The long and short of it is that if the stall provides no “service”, i.e. no individual food preparation, no place to sit down, no waiters, no whatever, then the sale of the food can only be the sale of a good.
Makes sense to me.
Next question is if the reduced rate can be applied if this food – which is sold for immediate consumption – qualifies as ‘foodstuffs” in Annex III of the VAT Directive. The VAT Directive, by the way is here if you need it (direct PDF download).
“Of course” says the Court, “and makes no distinction or restriction whatever according to the kind of business, method of selling, packaging, preparation or temperature.” “Foodstuffs” in the VAT Directive means “food” and this includes “food and meals which have been prepared for immediate consumption by boiling, grilling, roasting, baking or other means.”
The UK has a long tradition of regulations and case law on this issue – remember the heated or cold pastries – take-away or eat-in? See here for the UK rules, which are very likely to cause headache for the UK authorities. Potentially for other countries as well.
Below is a very interesting link on the subject. Bonus points for the first commenter who reviews the recipe in the link!
BTW – see the receipt below: take away food is apparently zero-rated in the UK – but the drink is standard rated…
(A hat tip to Jim Kelly from Corporate VAT Management.)