Reduced VAT rate and takeaway sales - Tax ruling - 06/29/2022

Question :

Is the takeaway sale, not intended for immediate consumption, of ice creams flavored with wine or beer subject to the normal rate of value-added tax (VAT) provided in Article 278 of the General Tax Code (CGI), applicable to alcoholic beverages with a volumetric alcohol content equal to or greater than 1.2% vol. or 0.5% vol. for beers, or does it benefit from the reduced VAT rate provided in 1° of A of Article 278-0 bis of the CGI and applicable to ice creams, sorbets, and other food ice creams?

Answer:

Under 1° of A of Article 278-0 bis of the CGI, VAT is levied at the reduced rate of 5.5% for operations involving non-alcoholic beverages, water, and products intended for human consumption.

Ingredients and food additives are subject to the same VAT rate as the food supports to which they are attached (I-C-5-a § 250 and 260 of BOI-TVA-LIQ-30-10-10).

Furthermore, products for which the liquid element is not predominant are not considered beverages and fall under the reduced rate generally applicable to food products other than beverages. Conversely, products in which the liquid element is predominant and containing traces of alcohol greater than 1.2% vol. are considered alcoholic beverages subject to the normal VAT rate.

The addition of wine or beer, as aromatic food ingredients or additives, in the food preparation to which they are incorporated, as long as it does not make the liquid element predominant, has no impact on the VAT regime applicable to the final preparation.