VAT in the Restaurant Industry – When 12%, 25%, or 6%

Swedish restaurant VAT is an area where small mistakes become expensive fast. Skatteverket (the tax agency) draws a strict line between food and alcohol, between dine-in and takeaway, and between restaurant service and pure goods sales. Vendion is built to follow the rules exactly so you don't have to calculate manually, but it helps to understand the logic.

The three VAT rates that occur in restaurants

Why is food 12% in restaurants?

Sweden introduced reduced restaurant VAT on January 1, 2012. The government cut VAT on restaurant and catering services from 25% to 12% to align serving with grocery sales (which were already at 12%). Alcohol was explicitly excluded – it remains at 25%.

The rule is simple in principle: if the guest gets access to a table, service, dishware or similar restaurant elements, it's a restaurant service and lies at 12% (except alcohol). If the guest only buys an item to take away without service, it's also 12% since it counts as food.

VAT-inclusive prices – the Swedish standard

In Sweden, all consumer prices are shown with VAT included. When your menu says "Entrecôte 285 SEK" it means 285 SEK is what the guest pays in total, including 12% VAT. Net (excluding VAT) is 254.46 SEK and VAT is 30.54 SEK. This differs from the USA where prices are shown without VAT and tax is added at the register.

The reverse formula: calculating VAT from an inclusive price

For 25% VAT:

• Inclusive price: 100 SEK
• Exclusive: 100 / 1.25 = 80 SEK
• VAT: 100 − 80 = 20 SEK

The VAT share equals 25/125 = 20% of the price.

For 12% VAT:

• Inclusive price: 100 SEK
• Exclusive: 100 / 1.12 ≈ 89.29 SEK
• VAT: 100 − 89.29 ≈ 10.71 SEK

The VAT share equals 12/112 ≈ 10.71% of the price.

How Vendion does it automatically

On every menu product you set a VAT rate (25, 12 or 6). When an order is placed, Vendion calculates VAT using the formula:

vat_amount = round((price_incl_vat * rate) / (100 + rate))

Identical formulas on both sides guarantee that the receipt, control box and bookkeeping always match. The VAT is stored broken down per rate on each order, letting you see exactly how much of each day was 12% versus 25%.

Common misconceptions

1. "Non-alcoholic beer is also alcohol" – No. Beverages up to 3.5% abv count as non-alcoholic and lie at 12%. Light beer (e.g. Falcon Light at 2.8%) is 12%; regular beer (5%) is 25%.
2. "Takeaway is always 12%" – Yes for food, but 25% for alcohol regardless of whether it's consumed on site or taken away.
3. "Coffee is always 12%" – Yes, as long as it's not served with whisky in it.
4. "Serving always has higher VAT" – False. Serving and takeaway of food both lie at 12%.

Exceptions to watch for

• Catering: Restaurant service performed at another location. 12% on food and non-alcoholic drinks, 25% on alcohol. Exactly the same rules as in-house.
• Hotel minibar: 25% on alcohol, 12% on snacks and soft drinks.
• Entertainment in the price: If a show ticket includes food and alcohol, you have to split – the culture ticket can be 6%, food 12%, alcohol 25%. Vendion can model this via product categories.

Related accounts (BAS chart of accounts)

Source: The Swedish VAT Act (ML Ch 7 § 1), Skatteverket's legal guidance "Restaurant and catering services".