When a lunch at the tax inspector’s restaurant turns into a tax audit

A tax inspector went to a restaurant for lunch and ordered a lunch special that included a draft beer. After insisting on seeing the receipt, he noticed that the VAT rate applied was incorrect. The restaurant had applied a set-menu rate with 10% VAT to the entire bill, even though beer is normally subject to a 20% VAT rate.

A few months after that lunch, the restaurant underwent an audit, during which the auditor relied in part on the observations made during his meal to justify the tax assessment.

Before the courts, the taxpayer argued, among other things, that the procedure was flawed.

The Administrative Court of Appeals ruled that the inspector’s visit constituted an unannounced inspection and that, since the inspector had failed to comply with the safeguards provided by law, the procedure was indeed partially irregular.

The tax assessment is therefore partially reversed.

CAA Lyon, July 2, 2025, No. 23LY01876

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