According to legislative changes that came into effect on 1 July, all food services are to be subject to the intermediate rate of VAT - which is 13% in mainland Portugal, 9% in the Azores and 12% in Madeira.

The new rate applies to all food sold in restaurants while for beverages the rate will vary. Alcoholic beverages, soft drinks, fruit juices and sparing water will remain subject to the top rate of VAT, while for still water, tea, coffee and mil the intermediate rate applies.

Takeaways and prepared food delivered to customer's homes is also to include the intermediate rate for food and the differing rules for drinks.