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Factsheet for measure BE-2020-24/970 Updated – measures in Belgium

Temporary tax reduction in the HORECA sector

Tijdelijke btw-verlaging naar 6% in de horeca

Country Belgium , applies nationwide
Time period Temporary, 08 June 2020 – 30 September 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
Author Dries Van Herreweghe (Katholieke Universiteit Leuven) and Eurofound
Measure added 13 July 2020 (updated 14 October 2021)

Background information

On 6 June 2020, the Council of Ministers approved a draft royal decree to reduce the VAT rate applicable to certain restaurant and catering services.

Despite the designation 'restaurant services', this also concerns the provision of non-food drinks (if accompanied by a sufficient number of relevant additional services) in all possible on-trade outlets (cafés, taverns,...).

This measure will apply to all permanent or temporary establishments providing restaurant or catering service.

Content of measure

As a result of this Royal Decree, from the 8th of June 2020 until the 31st of December 2020 a reduced value added tax rate of 6% will apply to restaurant and catering services, excluding the supply of beers with an actual alcoholic strength by volume exceeding 0.5% as well as other beverages with an actual alcoholic strength by volume exceeding 1.2% by volume.

There will be no exceptions other than the alcoholic beverages mentioned above. This means that dishes with products that are even priced at 21% (caviar, crawfish, lobsters, crabs, oysters, ...) are also subject to the 6% VAT rate.

Updates

The following updates to this measure have been made after it came into effect.

06 August 2021

On 21 April 2021, the Federal Government announced a new support package for the worst affected sectors, which includes the following measures:

  • VAT reduction to 6% until 30 September 2021 in the hospitality sector on meals provided and all drinks.
  • Exemption of the hotel and catering employers to pay the annual holiday contribution in 2021. The contribution will be paid by the federal government.
  • Introduction of a reduction in social contributions in the third quarter of 2021 for employers who take back temporarily unemployed workers and/or hire additional workers.
  • Various measures for workers who have become unemployed during the crisis.
  • By way of exception, the hours worked by a student in the third quarter of 2021 in closed sectors that are allowed to reopen will not be counted in the annual quota of 475 hours.

Use of measure

There is no registration of the uptake of the measure, given the general nature of the measure, it can be estimated that the majority of the sector can make use of it.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Unknown Consulted
Form Not applicable Unknown

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Sectoral or branch level

Involvement

Employers' associations like Horeca Vlaanderen have been negotiating lobbying heavily with the competent ministers to achieve additional support measures for the HORECA sector.

Views and reactions

As is to be expected, sectoral employers' organisations are clear proponents of these types of support measures. They have stated publicly that a reduction in VAT in particular is needed to increase the income of HORECA establishments and have defended this measure with the competent ministers.

Sectors and occupations

    • Economic area Sector (NACE level 2)
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities

This case is not occupation-specific.

Sources

Citation

Eurofound (2020), Temporary tax reduction in the HORECA sector, measure BE-2020-24/970 (measures in Belgium), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/BE-2020-24_970.html

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