VAT on foodstuffs
December 21, 2022
The Finance Act for 2022 provided for the simplification of the VAT rates applicable to foodstuffs. We will detail below what the law provides.
1) Application of the 5.5% rate
The rate of 5.5% is now applicable to all foodstuffs intended for human consumption, to similar products (intended to supplement or replace these products) as well as to products normally intended to be used in the manufacture of these foodstuffs for human consumption.
As a result, the VAT rate now applies to products throughout the food production chain, which was not the case before.
However, there are still exceptions to this rule:
- Certain foodstuffs such as confectionery, chocolate, margarines, caviar and alcoholic beverages are excluded
- Takeaway or delivery sales for immediate consumption subject to the 10% rate
- The same applies to restaurant services also subject to the 10% rate
- Medicines are subject to a special rate
2) Application of the 10% rate
The 10% rate is now applicable:
- Foodstuffs intended for animal feed, similar products (intended to supplement or replace these products) and products normally intended to be used in the manufacture of these foodstuffs for animals.
- Products intended for agricultural production: these include products of agricultural origin that have not undergone any processing; fishery products, fish farming or poultry farming products that have not undergone any processing; live foals.
It is important to note that the subsequent change in the use of the products does not call into question the base rate applied when used differently thereafter.
3) Practical implementation of the reform
Invoicing at an incorrect rate since January 1, 2022: the French tax authorities allow companies to issue corrected invoices when a VAT rate has been applied incorrectly.
However, the parties are not obliged to correct, it is only an option.
It is important to take into consideration the fact that a public consultation from 29 June 2022 to 15 September 2022 inclusive has been set up to allow interested persons to send any comments they may have to the administration.
The conclusions of this public consultation are therefore to be followed!
