Are you planning to open a small restaurant and need clarity on Value-Added Tax (VAT) policies for the food service sector? This guide compiles answers to frequently asked questions regarding VAT for the catering industry.
What is the VAT rate for catering services?
Catering services fall under the category of production and living services, specifically food and accommodation services. The applicable VAT rate for general VAT taxpayers is 6%. For small-scale VAT taxpayers, the levy rate is 3%.
Can small-scale VAT taxpayers in the catering sector enjoy VAT relief?
Yes, according to regulations, from January 1, 2026, to December 31, 2027, small-scale taxpayers are subject to specific thresholds. For a monthly tax period, the threshold is a monthly sales amount of 100,000 yuan. For a quarterly tax period, the threshold is a quarterly sales amount of 300,000 yuan. For transactions taxed on a per-occurrence basis, the threshold is 1,000 yuan per transaction or per day.
Furthermore, during the same period, small-scale taxpayers engaging in VAT-taxable transactions, excluding the sale or lease of immovable property or the transfer of land-use rights, will have their VAT calculated at a reduced levy rate of 1% instead of the standard 3%.
How is VAT applied to the sale of takeaway food?
For a catering service provider selling takeaway food, the transaction is subject to VAT under the "catering services" category. It is important to note that this applies specifically to food in which the catering enterprise participated in the production or processing. Simply reselling pre-made food without involvement in its production does not fall under this rule.
Does providing catering services within a university campus qualify for VAT exemption?
Yes, from January 1, 2026, to December 31, 2027, revenue generated from providing catering services to students and faculty in university canteens, as well as income from student dormitory accommodation fees charged at state-regulated rates, is exempt from VAT.
How can a general VAT taxpayer in the catering industry deduct input tax on self-produced agricultural products purchased from farmers?
A general VAT taxpayer in the catering sector purchasing self-produced agricultural products directly from agricultural producers may use tax authority-supervised agricultural product purchase invoices to calculate and deduct input VAT according to current regulations.
Can a buyer claim input tax credit for catering services used directly for consumption?
No, according to VAT regulations, input tax corresponding to purchased catering services, resident daily services, and entertainment services that are directly used for consumption cannot be credited against output VAT.
This information is based on relevant national tax laws and official announcements.
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