A company asks for the restitution of the VAT which it had to pay because of expenses related to the meals served free to its personnel in the absence of an alternative catering offer at the place of activity.
The French Conseil d’Etat (CE, October 11, 2017, No. 397902, “SAS Autogrill Côté France”) agrees with it on the grounds that if the free supply of meals by a company to its employees is in principle treated as a provision of services subject to VAT, it is different in the absence of alternative catering offer at the place of activity of employees.
Referring to the European case law (ECJ, 11 December 2008, C-371/07, Danfoss A / S and AstraZeneca A / S vs. Skatteministeriet), the Conseil d’Etat recalls that VAT liability does not cover the provision, free of charge, of meals in company canteens to business contacts in the course of meetings held on the company premises where objective evidence indicates that those meals are provided for strictly business-related purposes. On the other hand, the provision, free of charge, of meals by a company to its staff on its premises is neither subject to VAT at least when the needs of the company, such as the need to ensure that work meetings are run smoothly and without interruptions, require the employer to ensure that meals are provided.
In the case at hand, the company operates catering establishments located on the motorway network. As part of this activity, the company provides free meals to its staff.
In view of the activity on the motorway network, the Conseil d’Etat considers that the provision of meals to staff meets specific needs, considering the lack of alternative catering offer at the place of business of the company and, correspondingly, should not be treated as a supply of services for consideration for VAT purpose. The company can therefore deduct the VAT on its cost without accounting for VAT on the value of meals it provides free of charge to its staff under the aforementioned conditions.