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‘Eating posture’ tax codes to be scrapped

Germany wants to change confusing laws that subjects fast food stands to differing amounts of tax depending on whether their customers sit or stand to eat.

'Eating posture' tax codes to be scrapped
Photo: DPA

According to a report in Bild newspaper, the finance ministry intends to change the current tax laws, which subject fast food sellers to 19 percent value added tax if their customers eat while seated, and only seven percent if customers eat while standing.

In the future, the ministry plans to just levy the seven percent rate.

Traditionally, ‘restaurant services’ are taxed at the standard 19 percent tax rate, but ‘food delivery’ is one of 50 categories that qualifies for Germany’s reduced tax rate.

Last year Germany’s top financial court ruled that fast food qualified as ‘food delivery’ – and the corresponding lower tax rate – if patrons ate their sausages or fries while standing.

The decision followed an earlier one by the European Court of Justice in Luxembourg, which ruled that popcorn and nachos served in cinemas must be taxed at the reduced rate of seven percent – insisting they fell under the category of food delivery. This was true, said the court, even if the items were heated.

Germany’s finance ministry is set to discuss changing the law sometime in September, Bild reported.

The reduced tax rate was originally introduced to prevent basic necessities from becoming too expensive for the poor, but the list of exceptions has since grown to include things like hotel stays and theatre tickets.

However, grocery products like meat, milk, coffee still make up the largest category of products taxed at the reduced rate.

The Local/DPA/sh

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CROSS-BORDER WORKERS

Germany and France extend Covid tax breaks for cross-border workers

Germany and France have agreed to extend the relaxation of tax rules for cross-border workers until the end of the year.

Cross-border workers commute by car but they can for now continue to work at home
Cross-border workers usually have to commute but can for now continue to work at home.. Photo: Fabrice Coffrini / AFP

The agreements between France and the governments of Belgium, Luxembourg, Germany, Switzerland and Italy avoids double taxation issues for anyone travelling across the French border to or from those countries in order to work.

During the pandemic, tax rules were eased to allow French cross-border employees, like their counterparts in Belgium, Luxembourg, Germany, Switzerland and Italy, to work from home without having to change their tax status.

The deals, which were established at the beginning of the health crisis in March 2020, were due to end on September 30th – and would have plunged cross-border workers still working from home because of the health crisis into renewed uncertainty over their taxes.

The latest extension of these agreements means there’s no confusion over where a cross-border worker pays their taxes until December 31st – for example cross-border workers who work in Geneva but live in France, who normally pay their taxes and social security contributions in Switzerland. 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. If they exceed this time limit, they would have to pay these tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Belgium, Luxembourg, Germany and Switzerland “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In the case of Luxembourg, days worked from home because of the health crisis are not counted in usual the 29 day limit.

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