The man is behind his counter in a restaurant in Etterbeek. Two cash registers in front of him. One more visible than the other. The receipt comes out… It is not a VAT number. “You want?”, he asks. The gaze and the gesture switch to another box. “Yes, sometimes we don’t declare everything, especially for purchases from our “suppliers”. We moved here three years ago, at a bad time, but we love what we do, we fight. It would be complicated without that…”
“Without this”. Translation: there are still many opportunities for tax and social fraud in the on-trade sector. “In fact, there are double cash registers, one equipped with SCE (cash system, ed), the other not. Some establishments do not open their “SCE tills” every day or do not charge for certain “catering” services outside the restaurant. In the previous legislature, when Johan Van Overtveldt was Finance Minister, explains this picture of FPS financesrestaurants with SCE have obtained authorization from the Cabinet to include meals eaten at the end of a meal in the SCE, when the customer asks for the bill”, explains this expert from FPS Finances. Meaning: the capture of intermediate orders can continue to be done manually, so that in the case of regular customers who pay in cash, the order will not be subject to an SCE matrix.
Another clue? “In the case of the bridging fee for restaurateurs and managers, this is in 40% of cases higher than their declared salary”, adds our expert.
Introduced in 2010, amplified since 2016, wouldn’t the cash register system (SCE) therefore be the miracle recipe for fraud in catering? No. Far from it.
“The culture of fraud lives on in the hospitality industry”, confirms Damien Delatour, director general of the Labor Inspectorate. Both fiscally and socially. “In 2022, around 361 establishments were inspected in a targeted manner. A good number had in the meantime ceased or changed their activity. There were 214 left; 185 of these did not have an SCE. Of these 185, 53 applied the wrong VAT rate (again 12 and 21% instead of 6% during the health crisis)”, explains Francis Adyns, of SPF Finances. The social inspectorate, after having “frozen” a series of checks during the health crisis, also resumed normal control activity in 2022. One in two establishments was violated during the last flash check after the summer. “Like when the police announce speed checks, there are always people driving too fast. Here too, despite the warnings, there are always many establishments that cheat on the number of hours declared, that do not declare all, etc.”, explains Damien Delatour. Who, he says, stays ”doubt”: “I often hear people say that the sector can’t make it, but if you look at the prices charged in the Belgian on-trade, they are high. Much higher than in France, for example. Why is the culture of fraud well established? Because the rules are not adequate, because there is an adequacy problem between the observed frauds and the sanctions. Because the cash register is not mandatory everywhere (with few exceptions, ed)and which does not allow true flow tracking”, adds Damien Delatour in particular. What the Court of Auditors had also found in 2019.
Speakers, yes, but not everywhere
However, the existence of an SCE is mentioned in a field of the tax file of each VAT payable person for the restaurant sector. “Yes, but they are not systematically matched to VSC”, adds our expert from FPS Finances. VSC, for VAT signature card Where is it Smart cards, to enable SCE. In short, restaurants can very well have SCEs without them being activated…
In summary: not all restaurants have an SCE. The implementation rate, according to data received from FPS Finances, amounts to 78% in Brussels, 83% in Wallonia and 87% in Flanders, but FPS Finances acknowledges that this does not mean much as there are many movements, legislation is complex, etc. “And then not all catering establishments must have an SCE”, specifies Ludivine de Magnaville, president of the Horeca Federation of Brussels. “Of the 60,000 establishments involved in catering, approximately 21,800 have an SCE. And be clear, if certain establishments should not automatically have cash registers, such as discos (or those with less than 25,000 euros in turnover, ed), the state does not know which ones are connected or not. Only in case of control can the relief be made”, adds Ludivine de Magnanville, who is also a restaurateur herself. When SPF Finances announces that 3,295 VSCs have been issued since October 2021, that doesn’t mean much. In short, in terms of compliance (compliance) of the horeca sector (“restaurants”), the defects and shortcomings are such that the culture of fraud – “sometimes even with customers asking for discounts if they pay in cash”, protests Ludivine de Magnanville – she is firmly rooted in Belgium.
An avenue after the health crisis
The health crisis has given him an avenue, it must be said. “During the years 2020 (Covid period from March-April 2020) and 2021, the ‘PMI Pillar’ of the tax authorities could only control Isoc (corporate tax), IPP (individual income tax) and VAT only on fraud on turnover for the years 2019 and 2018, i.e. pre-Covid scam. And if we partially and completely slowed down the tax audits carried out during 2020 in 2021, this therefore allowed the ‘previous’ scammers not to be worried”, summarizes our expert from FPS Finances. To counter the SCE, the horeca sector, which has been particularly supported for years and years (subsidy reduction, VAT reduction, flexi-jobs, extended student work, etc.), has for some time presented an appeal against this mechanism. “We are no longer in this view of things. We want a clean industry, we support the white economy, we live in our times. You cannot complain about the lack of credit from the authorities and the administration without changing your mentality”, launches the president of the Horeca Brussels federation. Who has a proposal, addressed to the federal government: “the ‘SCE’ premium (award in the form of a reduction in social security contributions in the event of installation, editor’s note) amounts to 500 euros per worker and per quarter. Taking it to 1,000 euros would cost, in our opinion, 352 million euros, but would bring contributions, etc., 393 million euros. We don’t ask for anything, but we think it can clean up a sector, which is, whatever people say, a beautiful sector with quality, often artisanal work”concludes Ludivine de Magnanville.