The Value Added Tax (TVA en français) in French restaurants has just been lowered from 19.6% to 5.5%. What does this mean for you, the consumer? It means that prices in your local French bistro may go down a few euros. Or not.
The law which came into effect July 1st does not require restaurants and cafés to “pass the savings” on to their clients. In fact, many restaurant owners will use the extra savings to hire more staff (the economic minister predicts 40,000 new jobs over the next two years), improve the quality of their food, or renovate their properties (bonjour air conditioning!).
But don’t let that get you down, there are still plenty of establishments who will use discounted menus to bring in clients who have been shying away from dining out during the crise économique. Today I noticed a big sign promoting lowered prices at the Ristorante Bottega aross the street from me (the same group as Bistro Romain and Léon de Bruxelles). The lowered VAT will not apply to wine or other alcoholic beverages. Diners will most likely see it applied to the plat du jour, basic dishes and desserts, plus coffee. The gourmet and haute cuisine restaurants will most likely not lower their prices since their costs are much higher and there are fewer people dining in that top price range.
According to the authorities in the food industry, restaurants will have signs that clearly state «la tva baisse, les prix baissent», and will note on their menus which items have been reduced. It will be interesting to see how and where this is applied. This morning when stopping into my local café for a noisette, I saw hand printed signs saying café “€1” (usually it’s €1.20 at the bar). I always leave €1.50 anyway, and did so today (but nice anyway in case I’m low on loose change). So voila, so far so good. Has anyone eating out since July 1st noticed anything yet?