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Permanent Reduction in the Restaurant Sales Tax on Food from 2026 in Germany
Summary
Starting January 1, 2026, VAT on restaurant food will be permanently reduced to 7%. This change is part of the 2025 coalition agreement between CDU/CSU and SPD. To make it official, the VAT law will need to be updated in 2025.
Content
However, the government will need to cover the cost of this tax cut in future budgets. The reduced VAT is expected to save businesses about €3.5 billion each year, but that also means the government will collect €3.5 billion less in tax revenue annually.
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