The French hotel and restaurant sector

A VAT conundrum

15 August 2017

The summer is surely the perfect time to fall in love with the beauty of the French countryside while staying in a charming gite, B & B or even a small hotel in a château.

During those moments it seems like a perfect idea to escape the rat race and try running one yourself. And every year many foreigners try their luck in the French restaurant and hotel industry.

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Sadly, the complicated French VAT regime has turned many dreams into nightmares.

Some establishments are exempt while others aren’t. You will have to deal with rates at 20%, 10%, 5.5% and even 0% depending on what you sell. Some products and services even combine a mix of different rates. For example, a meal deal including a set menu and wine will require a calculation, as alcohol is taxed at a different rate from food. You also have to be careful and distinguish between the types of seafood platter you are selling as the rate of different products can vary.

And to complicate things even further, the rates in Corsica (or overseas departments like Guadeloupe, Martinique and la Réunion) are different from the ones in mainland France.

But do not give up on your dream of running that charming country house hotel. Instead get in touch for some valuable insights before you get started.

Author: Stéphane Sintes, HLB France, COGEP

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