The government is encouraging the distortion of competition: "The same can of cola will be taxed twice as much"

"The logic seems to have disappeared," laments Matthias De Caluwe, CEO of Horeca Vlaanderen, regarding the reclassification in the 2026 federal budget of certain products and services, thus switching to 12% VAT compared to 6% before.

Le premier ministre se prêtant au jeu lors de l'inauguration du nouveau centre de R&D du groupe Coca-Cola à Anderlecht il y a deux mois. © The Coca-Cola Company

Between strengthening controls against social and tax fraud, adjusting wage indexation, and standardizing tax rates , the De Wever government has finalized a budget agreement including several measures that will have a direct impact on hospitality businesses. One of these measures is of particular concern to the sector: the increase in VAT from 6% to 12% for several products and services such as hotel, hostel, and campsite stays, takeaway meals, and home delivery.

“The logic seems to have vanished,” laments Matthias De Caluwe, CEO of Horeca Vlaanderen. Because instead of taxing products with the same service equally, the few details presented by the federal government appear to create even greater disparities. “Imagine a chip shop next to a supermarket. A can of cola to go will be taxed at 12% VAT at the chip shop, while the same can, a few meters away in the supermarket, will be taxed at 6%. The same product, but taxed twice as much. This isn’t a level playing field. Encouraging distortions of competition can never be the goal. This needs to be urgently reviewed.”

Nearly 200 million euros lost on non-alcoholic beverages

The federal government's logic is also being questioned in the face of a measure that, nevertheless, provided "an immediate lifeline to tens of thousands of restaurants, cafes, and other food and beverage establishments, which are finally getting the long-awaited VAT reduction on non-alcoholic drinks consumed on the premises." Indeed, the VAT rate on soft drinks, still and sparkling water, juices, iced teas, and other 0.0% beverages has been reduced from 21% to 12%.

Based on 2024 tax revenues, Horeca Vlaanderen conducted a simulation of the impact of the reform introduced by the budget agreement: it would generate €274.6 million in additional VAT revenue for the federal government. However, if the VAT reduction on non-alcoholic beverages consumed on the premises had not been implemented, this amount would have risen to €463 million.

Urgent consultation and long transition demanded

The industry federation has long advocated for a comprehensive and balanced reform, taking inspiration from the current Dutch model with rates of 9% and 21% respectively. The aim is to adopt the Dutch policy on this matter which, according to Horeca Vlaaderen, provides administrative simplification, higher revenues, and more flexibility "for entrepreneurs who operate properly."

Given that the final legal texts of this federal agreement are still lacking, the Flemish body is calling for urgent consultations to address a series of concrete problems. "Take, for example, hotel rooms that were booked and paid for months ago. Who will bear the cost of the sudden doubling of the VAT rate? Businesses have no margin for error," notes Matthias De Caluwe, emphasizing that the impact will be enormous for hotels and other accommodations.

Horeca Vlaanderen is therefore calling for "good governance" and "respect for our entrepreneurs, especially for a sector that is the only one already operating with a cash register and now has to make a considerable new effort." And the best way to achieve this would be to establish a long transition period.