“Our activity has to be taxed at 10.5% and not 21%. The model that governs our tax system is a copy of the European one, which has two types of rates: the general one and the reduced one. Precisely, the reduced one is the one that is applied in the gastronomic hotel activities in Europe”, explained during the Colloquium the vice-president of FEHGRA, Rafael Miranda.
In this sense, Francisco Javier Sánchez Gallardo, Treasury Inspector of the State of Spain and Finance Counselor of the Embassy of Spain in Brazil, expressed himself during his presentation: “If a reduced rate of VAT is applied to a certain sector, it is encouraged that this sector has a higher volume of activity”.
“The reduced VAT, in a way, benefits consumers, but the main beneficiary is employment, since the sector to which the reduced VAT applies absorbs a greater number of employees. The real beneficiaries are the people who can find work in countries where tourism is essential”, he assured.
In a statement, the businessmen issued the arguments:
The reduced VAT rate for the sector is a proven tool in the European experience, which has benefited the large tourist reception centers, generating an enormous source of foreign exchange and dynamism for an activity that benefits all citizens. For these reasons, FEHGRA’s proposal is for the sector to have the permanent reduced rate that corresponds to it, as is the case in Europe.
Directive 2006/112/EC governs the structure of VAT in the European Union, focusing on the harmonization of the internal regulations of the member countries, and establishes a common structure, a uniform tax base and minimum rates.
This Directive suggested that the European Economic and Social Committee carry out a report on the impact of reduced VAT rates on local services (including restaurants) in terms of economic growth and job creation.
The results of this study determined that the application of reduced rates favors job creation and reduces the informal economy. Consequently, in 2009, “restaurant and catering services” were incorporated into the Directive in the list of eligible services to apply the reduced rate of VAT.
Source: Ambito
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