Portugal Socialists promise restaurant VAT rate cut
- Apr 28, 2015 | Richard Asquith
The opposition Socialist party has promised to reclassify food served in restaurants from the Portuguese VAT rate of 23% to the reduced VAT rate of 13%. The Socialists are currently ahead in the polls for this Autumn’s national elections.
Portugal has considered cutting VAT on restaurants a number of times. It originally moved supplies from the then reduced rate of 10% to the standard rate at the height of the Euro currency crisis in 2012 – Portugal received a financial bail out from the ECB, EU and IMF.
Growth returned to the sector in 2013 despite operating under the higher VAT rate, which had indicated that a reduction was unnecessary. Such a tax subsidy would cost over €300m per annum and would have to be approved by the Troika of the IMF, EBD and EU.