Germany Lowers VAT on Food in Restaurants to 7% from 2026

The German government has approved the Tax Amendment Act 2025. Starting January 1, 2026, the VAT rate for all food served in restaurants will be reduced to 7%. This change will support restaurants, cafés, bakeries, butchers, and catering businesses

What changes on January 1, 2026?

• Food eaten on-site in restaurants will drop from 19% to 7% VAT.
• This creates a uniform 7% VAT rate for:

• dine-in food,
• takeaway food,
• delivery food.

In short: same VAT rate, no matter how customers buy their food.

Business owners have two strategic options:

1. Lower prices

Restaurants can pass the VAT reduction on to customers. Lower prices may attract more guests and boost sales.

2. Keep current prices

Restaurants can keep prices as they are and keep the VAT difference as additional margin.

Either way, more guests dining on-site may also increase beverage sales, which supports overall revenue.

What happens to beverages?

Nothing changes for now:

• 19% VAT continues to apply to drinks (except milk-based drinks with more than 75% milk — these drop to 7%)

VAT rates overview

Category	VAT in 2025	VAT from 2026
Food eaten on-site	19%	7%
Food without seating (snack bars, food trucks)	7%	7%
Takeaway/delivery food	7%	7%
Beverages (general)	19%	19%
Milk drinks with >75% milk	19%	7%

 

What should businesses change at their checkout?

Until December 31, 2025:

• 7% for dine-in food,
• 19% for takeaway/delivery.

From January 1, 2026:

• Only one VAT rate for food (7%),
• No need to switch between "eat-in" and "takeaway" price levels, checkout becomes faster and simpler.