Tax in France restaurants drops - will the price?

VAT changes in France

After years of discussions between restaurants, the French government and the European Union, it finally happened! Instead of applying a 19.6% VAT on the bill, restaurants will now apply a lower tax of 5.5%. It had been a promise made by Jacques Chirac, and was a subject of conflict between the government and the restaurants union. So today, all the newspapers talk about this change, and how it should reflect on the overall bill. Officially, restaurants and cafés are supposed to reflect this tax change by lowering their prices. Officials also hope that the employees will see a raise in their paycheck, and that it will create more job in this industry. If you believe the media, it is the magical pill that will solve all the problems restaurants are facing right now, and will have everyone in France rush to the restaurants. Will it really shows on the bill? Personally, I don’t think so. I hope it does lower the price by a few Euros, but I wouldn’t count on it. Many restaurants say that they are struggling to make money, and have already announced that they will not use this to lower the price but to have a better margin.

It will take some time to determine the consequences of this change on prices, as the summer season is here, summer prices have arrived and depending on where you travel, some places charge a ridiculous amount of money compared to the quality of products/services they offer. So one piece of advice for all of you traveling, don’t jump on the first restaurant you see. Take some time to walk around and see the various options you have.