Government crackdown on international restaurant spending

Dutch restaurant association, IGDB, has announced a “tax relief” proposal aimed at eating out more often or restricting what diners can spend on their meal. If adopted, restaurants would be able to deduct their international bills from their main income tax, or allow them to pay a fixed tax rate, depending on how much euros restaurants spend with suppliers.

IGDB wants the government to prioritize quality over quantity of meals, a trend it says can create serious problems for restaurants. Prices are lower for internationally-priced meals, and up-market restaurants tend to attract greater diners. These factors make it easier for restaurants to balance their books.

IGDB says the model has proved controversial in the Netherlands, where the government has banned many sit-down restaurants that offer food for two or more people. “Tax relief can create a situation in which too many tourists and students are unwilling to pay a small hotel surcharge or big food bill in some areas and also low prices with no sweetener,” IGDB Chief Executive Veronika Cojockel says.

An IGDB spokesman told EurActiv that it’s unlikely the government will pass its legislation, which IGDB hopes will be made public on October 1. The proposal would entail restaurants signing a contract between their holding company and the Dutch Government, which would have to commit to reimburse restaurants in the country’s income tax if their sales are below a certain amount. The first payment would be made in cash, but the Dutch Government would have to cover the remaining costs.

“Those expecting a large number of restaurants to suspend eating out for a period of time will be disappointed,” says IGDB spokesman Ed Van Damme. “But if there are only a small number of restaurants that want to do that, there will be arrangements to reimburse them in the first instance.”

IGDB will likely argue that this reform is the equivalent of giving consumers the right to buy home appliances from local suppliers, says Carsten Janus. In this case, local suppliers are unlikely to seek reimbursement for these types of purchases.

The association doesn’t have any quarrel with local suppliers, but says the relatively low-priced meals at a different restaurant doesn’t justify a 10% VAT that’s imposed across the country. “The information on the menus also means that the consumers don’t realize that the difference can run into tens of euros per meal and can affect their purchasing power,” says Van Damme. “In markets where international restaurants are small, prices are usually lower, but if the prices differ by a few euros, and international restaurants serve lots of diners, that’s not fair.”

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