From now on, consumers in Cyprus will be paying less VAT on alcoholic beverages in bars, entertainment centres, cafes, pubs and night clubs Philenews reported on Tuesday.
Up until recently, taxpayers were paying 19% VAT when consuming alcoholic drinks only in these places, in accordance with the law as interpreted by the previous Tax Commissioner.
But if their drinks were accompanied by food as well, they only paid 9% VAT. A court decision, however, changed this and whether food is consumed or not they will now all be subject to 9% VAT.
Under the VAT law, restaurant and catering services are subject to the reduced 9% VAT rate.
According to the provisions of the legislation, “restaurant and catering services are defined as services consisting of the supply of prepared or unprepared food or drink, or both, for human consumption, accompanied by adequate support services enabling their immediate consumption.
“The supply of food or drink or both is only one element of the whole in which services are largely predominant. Restaurant services cover the provision of such services on the premises of the provider and catering services cover the provision of such services.”
According to the Administrative Court’s decision, support services include any combination of services related to the operation of a kitchen, services of taking an order, preparing and serving the order and providing a prepared and furnished area for the immediate consumption of food and/or beverages.
