Comparing restaurant costs in France and Israel helps to better understand the accounting differences between the two countries.
Indeed, these distinctions are of great importance to companies and individuals doing business in both countries. Whereas in France, restaurant expenses can be deducted under certain conditions, in Israel this is not the case (except in truly exceptional cases). It is therefore essential to master these specificities in order to optimize your tax situation and make the right decisions.
Restaurant expenses recognized in France
In France, restaurant costs are defined as expenses incurred by a company or an individual for meals taken on business premises. To be deductible, these expenses must meet certain conditions and be supported by invoices. It is important to note that, unlike France, these expenses are not recognized in Israel.
Conditions for deductibility of meal expenses
For restaurant expenses to be deductible, they must meet a number of criteria. Firstly, it must be incurred in the interests of the company and be directly related to its business. In addition, the amount of the expense must be reasonable and proportionate to the business context. Finally, it is essential to keep supporting documents for these expenses, such as invoices, so that they can be deducted from taxable profit.
Examples of situations where restaurant expenses are deductible
Here are some examples of situations in which restaurant expenses may be deductible in France :
- A company director invites a customer to lunch to discuss a contract.
- A team of sales representatives meet in a restaurant for a debriefing after a day's prospecting.
- An employee on a business trip has to take meals away from home.
On the other hand, expenses incurred for meals unrelated to the professional activity are not deductible.
Tax treatment of food expenses in Israel
Unlike France, restaurant expenses are not recognized in Israel. This difference in tax treatment can have consequences for companies and individuals operating in both countries.
No recognition of restaurant expenses in Israel
In Israel, business-related food expenses do not benefit from the same tax treatment as in France. They are not deductible from taxable profits. This lack of recognition may come as a surprise to companies and individuals accustomed to the French tax system.
Reasons why food expenses are not deductible in Israel
There are several reasons why restaurant expenses are not deductible in Israel. Firstly, the Israeli tax authorities may wish to simplify the tax system by limiting the number of possible deductions. Secondly, this difference may also reflect political or economic choices specific to Israel.
Finally, and most importantly, there is a real cultural difference in inviting a customer/prospect/supplier to lunch in Israel.
Tax comparison of meal expenses between France and Israel
There are significant tax differences between France and Israel when it comes to restaurant expenses. In France, business meals benefit from tax advantages, including deductibility of expenses under certain conditions. In Israel, however, such expenses are only recognized when you invite a foreign client to lunch.
In this case, you'll need to take a photo of your passport, and keep a record of the reason for your invitation (new order, diary confirmation, etc.).
Tax treatment of restaurants in France and Israel
The tax regimes for restaurants in France and Israel differ considerably in terms of VAT and possible exemptions. As mentioned above, restaurant expenses are deductible in France, but not in Israel.
VAT rates on restaurant meals
In France, the VAT rate applied to meals in restaurants varies according to the nature of the services provided. The standard rate of 20% applies to sales of alcoholic beverages, while the reduced rate of 10% applies to sales of food and non-alcoholic beverages. In Israel, on the other hand, the standard VAT rate is currently 17% and applies uniformly to sales of food and beverages, whether alcoholic or non-alcoholic.
Possible VAT exemptions and reductions
In France, certain VAT exemptions and reductions are available for restaurants. For example, school canteens, meals served in hospitals and social establishments can benefit from VAT exemptions or reduced rates. In Israel, on the other hand, there are no specific VAT exemptions or reductions for restaurants. Even a tourist visiting a restaurant will have to pay Israeli VAT.
Differences between the two countries' tax systems
The main differences between the tax regimes for restaurants in France and Israel concern the deductibility of restaurant expenses and the VAT rates applied. Whereas in France, restaurant expenses can be deducted under certain conditions, in Israel this is not the case, which can have consequences for companies and individuals doing business in both countries. In addition, VAT rates vary between the two countries, with a standard rate of 17% in Israel and variable rates in France depending on the nature of the services provided.
Cabinet Dray & Natco's tax services
Dray & Natco is an accounting and tax firm specializing in Israeli tax regulations. Thanks to our in-depth knowledge of the specific tax situation in each country, we are able to provide companies and individuals with effective support in managing their tax affairs in France and Israel. In addition, our services are tailored to the specific needs of both French and Israeli clients, enabling us to provide tailor-made solutions to optimize our clients' tax affairs.
Israeli accounting and tax expertise
Dray & Natco has recognized expertise in Israeli accounting and taxation. We are able to advise clients on the best practices to adopt to optimize their tax situation in Israel, particularly with regard to restaurant expenses, which are not recognized in this country.
Our services are tailored to the specific needs of French and Israeli customers.
To sum up, the main tax differences between France and Israel regarding restaurant expenses are noteworthy. Whereas in France, these expenses can be deducted under certain conditions, in Israel, this is not recognized. It is therefore crucial to understand these differences in order to optimize your tax situation and make the best decisions.