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Restaurants must lower prices

Owners must agree 10% drop on key menu items to benefit from VAT cut this summer.

RESTAURANTS must promise to drop their prices by at least 10% to earn a break on VAT.

A drop in VAT rates from 19.6% to 5.5% could be seen in France as early as July 1.

Commerce Minister Hervé Novelli said those wanting the lowered rate would have to drop the prices of key menu items including starters, the dish of the day and a black coffee.

“The lowered prices will have to be indicated clearly, be verifiable – and verified,” Mr Novelli said.

The details will be revealed during a restaurant industry summit at the Finance Ministry tomorrow, he added in Le Journal du Dimanche.

Restaurant owners wanting the lowered rate will have to sign a contrat d’avenir (contract for the future) making certain pledges on prices, jobs and investment.

This is to help off-set the state’s losses due to the reduced tax, which will be about €2.5 billion a year.

A committee will be put in place to monitor whether the rules are being adhered to.

France was given the green light to lower VAT in the catering sector (among several others) by the EU in March this year.

Restaurant owners, who have been seeing lowered profits, are hoping it will be applied by July 1.

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