Type: Legislation
Effective Date: January 1, 2026
The new German coalition government (CDU and SPD) has confirmed it will reintroduce the 7% reduced VAT rate for food sales by hospitality businesses starting 1 January 2026. This rate was originally introduced as a COVID-19 relief measure in 2020 and remained in place until 1 January 2024. It had been extended multiple times to support restaurants and cafes amid inflation concerns and economic recovery. The decision to reintroduce the reduced rate is part of a broader coalition agreement on economic policies. The Federal Council has approved the move, and it will be officially published.
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