French Restaurants Prepare for VAT Cut

French restaurants prepared to cut prices on meals and soft drinks ahead of a new lower sales tax rate that comes into effect on Wednesday after years of lobbying European partners by successive governments

Value added tax on restaurants and cafes will fall to 5.5 percent from July 1 from 19.6 percent previously after a deal hammered out with European Union partners in March following a 7 year-long campaign by Paris. As part of the deal, restaurant trade bodies signed up to a so-called "contract for the future" under which they agreed to step up hiring and create 40,000 new jobs over the next two years – reports Reuters.