The article points to an interesting discrepancy between providing a hospitality service and selling takeaway meals. The first one is taxed at 21% rate, while the latter, at 15%.
Everyone who has ever eaten at a fast food restaurant (and haven't we all?) has heard the question. After having queued for a bit, one orders their favourite hamburger and double chips and gets asked the fast food restaurant worker's magic formula: "eat-in, or takeaway?". "How caring!", we could perhaps think and expect that he or she only need to know whether they ought to arrange tour order neatly on a tray or just stick it in a paper bag. Looking at it from a tax point of view, however, there is a bit more behind the question than just what to do – an interesting issue not even the waiter might be realising.
There are three VAT rates in the Czech Republic, a standard one of 21% and reduced ones of 15% and 10% respectively. The standard applies with services and goods unless the law expressly doesn't state otherwise. Furthermore, the law also distinguishes between delivery of goods and rendering a service and that is where the proverbial rub lies.
If we decide for the first option, it is not a case of selling/delivery of goods but rendering a service, which follows the basic rule, i.e. it is taxed at the standard rate. Although the meal consumption is the primary goal of the event, the customer also makes use of some additional services, such providing the table etc.; hence, the service provider is obligated to pay the VAT of 21%.
Taking the meal away, on the other hand, does not fit in this category, but it is to be dealt with as delivery of goods, which is to be taxed at the reduced rate of 15%. It means that the provider's margin rises by 6% since most of the restaurants put the same price to both, i.e. eating in and taking the meal away, and do not distinguish the different VAT rates. What it means is that the meals cost the same regardless whether eaten on the premises or not. It also makes the customers to consume their dinners in front of the restaurants and thus leaving them empty...