Portugal’s tax authority has launched a surveillance operation to ensure that restaurants are complying with the new VAT rates, are issuing receipts and generally playing their part to stamp out the parallel economy of undeclared meals and tax evasion.
A reported 500 tax inspectors have been released on an unsuspecting sector at the busiest time of year until ‘the end of the summer.’
A statement issued on Tuesday 19th July, by the Ministry of Finance reports that the Tax and Customs Authority (TA) started its "large-scale action" on July 15th, throughout the country, to "evaluate, promote and support voluntary compliance with tax obligations and tax payments."
Operation 'Ação Menu' (Action Menu) is designed to combat cheats and those evading taxes by not issuing VAT invoices to customers. The 500 inspectors have a remit of “verifying compliance with the obligations of invoicing and the correct application of VAT rates."
When on July 1st the VAT rate finally dropped from 23% back to 13% on food and certain drinks, Portugal’s association for restaurateurs (AHRESP) promised that in return its members would not cheat the taxman, inferring that this had been the general practice during the 23% VAT 'austerity' period.
The VAT reduction was a pre-election promise from the Socialist Party, and in this instance, a promise that it upheld - albeit seven months later than expected.
Alcoholic drinks, soft drinks, fruit juices and fizzy water remain at the 23% rate, with still water, tea and coffee going down to 13% along with eat-in meals.
To end up with lower restaurant bills, customers could opt for 13% VAT still water, not 23% VAT fizzy water, and say 'no' to the bread, butter, cheese and olive pre-meal nibbles, unless too hungry to resist. Waiters now must ask customers if they want these served, making it easier to say 'no.'
