13,5 and 25,5 on one bill

Four people at a table order two burgers, two beers, a lemonade and a kids’ meal with a toy in the box. The bill says one number. Behind it are two rates of VAT, and a toy that went all the way to the Supreme Administrative Court.

Most restaurants get the plain cases right. Where it goes wrong is the bundles: the lunch that comes with a beer, the menu with a toy, the button on the till that says “Food” and gets pressed for anything. None of those is exotic, and each of them decides a rate.

The rule in one paragraph

Foodstuffs and restaurant and catering services are taxed at the reduced rate of 13,5 %, since 1 January 2026, down from 14 %. Alcoholic drinks and tobacco are not: they carry the general rate of 25,5 %.¹ A drink that is not an alcoholic drink under the Alcohol Tax Act is a foodstuff and takes the reduced rate, which is why the alcohol-free beer and the beer next to it on the same shelf are taxed differently.²

Each item keeps its own rate

Verohallinto’s guide calls it the splitting principle. Each sale of goods or services is assessed on its own, and “in practice the splitting principle means that the VAT treatment of every item a company sells has to be worked out separately.” Its own example is a Christmas hamper sold at one price: the mulled wine and the gingerbread take the food rate, the candles and the basket the general rate.²

The exception is a genuine single supply, where one thing is the point and the rest only serves it. That exception is narrower than it sounds, and a fast food chain found out how narrow.

The kids’ meal that went to the highest court

In 2015 a hamburger restaurant sold a kids’ meal of a burger, fries, a drink and a toy for 4,95 EUR. The same meal without the toy was 4,00 EUR, and the toy on its own cost 2,00 EUR. The company taxed the whole kids’ meal at the food rate, and Verohallinto accepted it. So did the administrative court.³

The Supreme Administrative Court did not, by three votes to two. It held that the meal and the toy could not be treated as one supply, because the toy was available separately, the customer kept it, and its share of the price was neither small nor hidden: the company’s own price list showed it. The toy had to be taxed at the general rate, then 24 %, now 25,5 %.³

One price is a way of selling. It is not a way of taxing.

Notice what did the damage. Not the toy. The price list. A restaurant that sells a thing both inside a bundle and on its own has already told the tax administration what that thing is worth, and that number will be used.

The lunch that comes with a beer

The same logic reaches every meal deal with alcohol in it. A lunch and a beer sold together at one price are still a meal at 13,5 % and a beer at 25,5 %. The price has to be divided between them, and the division has to be one somebody can check.

The guidance does not prescribe a formula for this case. The defensible way, and the one the court’s own reasoning leans on, is the items’ own prices: divide the bundle in proportion to what each part costs when sold alone, write that rule down once, and apply it every time. Agree the rule with your accountant before the first deal is sold, not after the first question.

Where it is actually decided: the till

Nobody picks a rate at the end of the month. The rate is picked when a product is set up on the till, and then it is picked again every time a button is pressed. The Z report adds the day up rate by rate, and the VAT return asks for exactly that: the tax on domestic sales, entered separately for 25,5 %, 13,5 % and 10 %.⁴ If a beer was rung up under a generic food key, the return is wrong before anybody opens a spreadsheet.

This is also where an inspection starts. Verohallinto’s intensive campaign in restaurants ran from early 2023 to autumn 2025. It covered 373 businesses, mostly pizza, kebab and Chinese restaurants, sent 198 of them, 53 %, to be considered for criminal investigation, and found 18,3 million EUR of unreported income and 4,8 million EUR of VAT to assess.⁵

To be fair to the numbers, that campaign was about income that never reached the till at all, and about wages paid off the books, not about rates. But it shows what an inspector opens first, which is the till data, and what they compare it with, which is the return. A till that knows the right rate for every line gives them nothing to find in the second half of that comparison.

Six things to check on your own till

• Every product has its own rate, set when it was created, and nothing alcoholic sits on a 13,5 % key.Look for generic keys such as “Food” or “Drink”. They are where beer goes to be taxed at the food rate.
• Alcohol-free beer and wine are on 13,5 %, not 25,5 %.The mirror mistake. It costs you, not the state.
• Every bundle with two rates in it has a written allocation rule, and the till applies it.Lunch with a beer, a menu with a toy, a brunch with a glass of sparkling wine.
• Toys, merchandise and gift items sold with meals are on the general rate.KHO 2022:58.
• The Z report shows sales and VAT per rate, and the monthly totals match the rate lines of the VAT return.If they do not match to the cent, find out why before you file.
• When a price changes, the rate stays with the product and does not have to be set again.A new key made in a hurry is the most common place for a wrong rate to be born.

What this means for software

A VAT return for a restaurant is not a calculation. It is a sum of decisions already made on thousands of lines, each at the moment a product was set up or a button was pressed. Software that asks for the rate at the end of the month is asking the wrong person at the wrong time.

The rate belongs on the line, taken from the product, with bundles split by a rule that is stored with the bundle. Then the Z report is a sum, the return is a sum of Z reports, and an inspector who asks “why is this beer at 13,5 %?” gets an answer that is a line of data rather than a shrug.