Many restaurant owners think they only need to worry about VAT, but that's just the beginning. You'll face multiple tax obligations - from VAT to income tax and corporate tax. The exact amount depends on your legal structure and annual turnover.
VAT - Your largest tax expense
VAT will likely be your biggest tax bill. You collect it from customers and send it to the Tax Authority.
💡 VAT rates hospitality:
- Food in restaurant: 9% VAT
- Takeaway/delivery: 9% VAT
- Alcoholic beverages: 21% VAT
- Non-alcoholic in restaurant: 9% VAT
You'll file VAT returns monthly or quarterly, depending on your turnover. Once you hit €1,883 in annual revenue, you're VAT liable.
⚠️ Note:
You can reclaim VAT on business purchases. Save every invoice from suppliers, equipment and services.
Income tax (sole proprietorship) or corporate tax (BV)
Your profit tax depends entirely on your business structure:
- Sole proprietorship: Income tax on profits (37% to 49.5%)
- BV: Corporate tax 25.8% on profit above €200,000, 25% up to €200,000
- Partnership/General partnership: Each partner pays income tax on their share
💡 Example BV calculation:
Restaurant earning €150,000 profit annually:
- Corporate tax: €150,000 × 25% = €37,500
- Remaining profit: €112,500
If you take this as salary, you'll pay income tax again on those wages.
Payroll tax for employees
Got staff? You'll withhold payroll tax from their wages and send it to the Tax Authority. This includes:
- Payroll tax and social insurance premiums
- Employee unemployment, disability and health insurance
- Employer social insurance contributions
The employer portion sits on top of gross wages. From analyzing actual purchasing data across different restaurant types, budget around 20-25% extra costs.
💡 Example staff costs:
Chef earning €2,500 gross monthly:
- Gross salary: €2,500
- Employer social insurance: ~€575
- Your total cost: €3,075
Additional taxes and levies
You might face extra taxes based on your situation:
- Real estate tax (OZB): If you own your building
- Terrace tax: For outdoor seating on public property
- Waste collection levy: Business waste collection (typically higher than residential)
- Sewer tax: Municipal sewer connection fees
⚠️ Note:
Municipal rates vary dramatically between cities. Contact your local municipality for specific rates.
Tax burden as percentage of revenue
Calculate your total tax load as a percentage of turnover for better planning:
💡 Example restaurant €500,000 turnover:
- VAT payments (net): ~€15,000 (3%)
- Corporate tax: ~€25,000 (5%)
- Staff payroll tax: ~€45,000 (9%)
- Municipal levies: ~€3,000 (0.6%)
Total: ~17.6% of turnover goes to taxes
These percentages make budgeting easier. Set money aside monthly for taxes so you won't scramble during payment deadlines.
How do you calculate your total tax burden? (step by step)
Determine your VAT balance per month
Add up all VAT you charge to guests. Subtract from that: VAT on purchases, equipment and services. The difference you remit to the Tax Authority.
Calculate tax on profit
Take your expected annual profit. For a BV: multiply by 25%. For a sole proprietorship: use the income tax table (37-49.5% depending on income).
Add payroll tax and municipal levies
Find payroll tax for staff on your payroll returns. Municipal levies are assessed to you annually. Add everything up for your total tax burden.
✨ Pro tip
Review your VAT split ratios every 6 months - restaurants averaging 15% alcohol sales often under-collect the 21% rate, creating surprise tax bills.
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
Do I need to track separate VAT rates?
Yes, keep food (9%) and alcoholic beverages (21%) separate in your records. Your POS system must split these rates for accurate VAT returns.
What's the difference between a sole proprietorship and BV for taxes?
Sole proprietors pay income tax on profits (up to 49.5%). With a BV, the company pays corporate tax (25%) and you pay income tax again on any salary you take.
Can I use the small business exemption as a restaurant?
Technically yes, if annual turnover stays under €20,000. But this threshold is too low for most restaurants, making the exemption impractical for food service businesses.
📚 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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