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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.
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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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