France -VAT cut on meals
 

I just read that there has been a cut in the VAT from ~19% to ~5% on restaurant meals in order to help the strugglig industry. Anyone have news on this, noticed if this was being passed on to customers?

That is a significant cut!

Waiting with interest.

In France, take out orders are taxed at 5.5% while eat-in was taxed at 19.6% up until July 1st 2009. Now both are at the lower rate. The restaurateurs (owners) have publicly committed to lowering their prices, modernizing their establishments, hiring additional workers (waiters, etc.), raising salaries of the current staff, or any combination thereof.

The ones who decided to adjust their prices downwards are most certainly advertising it visibly to attract new customers. Early reports seem to confirm that a number of establishments have adjusted their prices accordingly. Presumably, market forces and competition will do the rest I suppose.

kanadajin

NYT article on the reduction:

http://www.nytimes.com/2009/07/01/wo...e/01paris.html

It looks like some will reduce their prices (even if just a little) and others will pocket the money hoping to hire more staff. So who knows.

I've been reading articles over the past few years of cafes and such closing, so will be interesting to see. (It does apply to cafes?). All in all, a positive move, it would seem.