Picture this: your daily till shows €2,500 in revenue, but your actual income is only €2,248. VAT significantly affects your restaurant P&L but gets overlooked in profit calculations. Many restaurant owners calculate with VAT-inclusive prices, distorting their actual margins.
VAT rates in hospitality
Different VAT rates apply for hospitality businesses in the Netherlands:
- 9% VAT: Food and non-alcoholic beverages (dine-in and takeaway)
- 21% VAT: Alcoholic beverages
- 21% VAT: All other costs (rent, energy, marketing)
⚠️ Important:
You must always work with amounts excluding VAT for P&L calculations. The VAT you collect from guests gets passed to the Tax Authority — this isn't your revenue.
VAT impact on your revenue
Your actual revenue is always excluding VAT. If your menu shows €100 in revenue, your real revenue is lower:
💡 Example revenue calculation:
Daily till revenue: €2,500
- Food (9% VAT): €2,000 → €1,835 excl. VAT
- Beverages (21% VAT): €500 → €413 excl. VAT
Actual revenue: €2,248 (10% lower!)
VAT in your food cost calculation
For accurate food cost calculations, divide ingredient costs by the selling price excluding VAT:
Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
💡 Example food cost with VAT:
Pasta carbonara on menu: €18.50
- Ingredient costs: €5.20
- Price excl. 9% VAT: €18.50 / 1.09 = €16.97
- Food cost: €5.20 / €16.97 × 100 = 30.6%
Incorrect (with VAT): €5.20 / €18.50 × 100 = 28.1%
VAT impact on your P&L structure
From analyzing actual purchasing data across different restaurant types, here's how a proper restaurant P&L should look:
- Revenue (excl. VAT): Your actual income
- Cost of goods sold: Ingredients, beverages
- Gross profit: Revenue minus cost of goods sold
- Operating costs: Staff, rent, energy (often excl. VAT)
- EBITDA: Profit before interest, tax, depreciation
💡 P&L example (monthly):
- Revenue excl. VAT: €45,000
- Food & beverages: €14,000 (31% food cost)
- Gross profit: €31,000 (69%)
- Staff: €18,000 (40%)
- Other costs: €8,000 (18%)
EBITDA: €5,000 (11%)
VAT refund and cashflow
As a VAT-registered business, you can claim back VAT on purchases. This improves your cashflow:
- VAT on food purchases: 9% back
- VAT on beverage purchases: 21% back
- VAT on business costs: 21% back
⚠️ Important:
Maintain proper VAT records. Without correct receipts and invoices, you can't claim VAT back. This can save you hundreds of euros monthly.
Digital VAT administration
Food cost management systems help you calculate ingredient costs and selling prices correctly excluding VAT. You'll see your actual food cost percentages directly without manual recalculations.
How do you calculate VAT impact on your P&L?
Split your revenue by VAT rate
Divide your daily revenue into food/non-alcoholic (9% VAT) and alcoholic beverages (21% VAT). Convert both back to amounts excluding VAT.
Calculate your actual revenue
Add up the amounts excluding VAT. This is your actual revenue for P&L calculations. Use these figures for all ratio calculations like food cost.
Check your cost percentages
Calculate food cost, staff costs and other ratios based on revenue excluding VAT. This gives you the correct percentages to manage your business.
✨ Pro tip
Reconcile your VAT calculations weekly by comparing your POS system's VAT breakdown against your actual deposits. A 2% variance over 4 weeks signals pricing errors that could cost you thousands annually.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include VAT in my food cost calculation?
No, always calculate using selling prices excluding VAT. Otherwise your food cost appears lower than reality. Divide ingredient costs by the price excluding VAT to get accurate percentages.
Why is my actual revenue lower than my till revenue?
Your till displays amounts including VAT. Your actual revenue excludes VAT since that portion goes to the Tax Authority. This creates a difference of about 8-17% depending on your product mix.
Can I claim back VAT on mixed-use items like cleaning supplies?
Yes, but only the business portion. If you use supplies 80% for business and 20% personal, you can claim back 80% of the VAT. Keep detailed records to justify your claims during audits.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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