Austria will halve VAT on selected essential food products from 10% to 5% starting 1 July 2026, aiming to ease household living costs and deliver immediate savings at the checkout amid persistent food price pressures. The measure, confirmed on 14 January 2026, is part of a broader anti-inflation strategy and will be partly funded through new taxes on non-recyclable plastics and fees on non-EU parcels, with details on eligible products to follow.
Austria to Cut VAT on Essential Food from July 2026
Public
Austria
Author: Ivana Picajkić
Category:
Fiscal subject related
Views:
4247
Content accuracy validation date:
21.01.2026
Content accuracy validation time:
08:28h
Austria plans to halve VAT on essential food products to help households cope with high living costs.
From July 1, 2026, VAT on a selected group of staple foods will be reduced from 10% to 5%. This is intended to lower everyday grocery bills and ease pressure on consumers.
The decision was confirmed on January 14, 2026, reflecting ongoing concern about inflation. Although inflation in Austria has started to slow, food prices remain a major burden for households.
To help finance the VAT cut, the government plans to introduce a tax on non-recyclable plastic from October 2026. Austria also plans to introduce fees on parcels imported from non-EU countries, such as China.
Similar food VAT reductions have recently been announced in Sweden and Denmark.
The Austrian government says rising prices for basic goods are directly affecting households. Lowering VAT on a “selected shopping basket” of essential food is meant to deliver immediate and visible savings at the checkout.
The VAT cut is also part of a wider strategy to reduce inflation to around 2%, compared with current higher levels. Officials have warned that prolonged inflation harms consumer confidence, domestic retail, and Austria’s overall economic competitiveness.
The government has not yet published the exact list of food products that will qualify for the 5% VAT rate. Further details are expected closer to the start date.
This clarification will be important for retailers, suppliers, and VAT systems, as correct product classification will determine which sales benefit from the reduced rate.
Other news from Austria
New Austrian Decree Updates Cash Register and Receipt Requirements
Public
Austria
Author: Ivana Picajkić
Austria
Author: Ivana Picajkić
The Federal Ministry of Finance has republished its decree on cash registers and receipt obligations, replacing the 2019 version and updating compliance rules for businesses and certain public or non-profit entities. The revised framework raises thresholds for simplified cash-based recording to €45,000 turnover while confirming that entities exceeding set limits must transition to electronic cash... Read more
Overview of E-Invoicing in Austria
Public
Austria
Author: Austria
Austria
Author: Austria
In Austria, electronic invoicing is mandatory for suppliers invoicing federal public authorities, requiring the use of structured formats (e.g., EN 16931, ebInterface, or Peppol) via platforms like e-Rechnung.gv.at or the Peppol network. However, for B2B transactions e-invoicing remains voluntary, although widely used for efficiency and automation. Austria was one of the first countries in Europe... Read more
Austria Introduces a New 4.9% Reduced VAT Rate for Essential Food
Public
Austria
Author: Ivana Picajkić
Austria
Author: Ivana Picajkić
Austria has introduced a new 4.9% reduced VAT rate for specific essential food products under § 10(1a) UStG 1994, effective July 1, 2026, to lower consumer costs. The rate applies only to goods precisely matching defined CN codes, requiring businesses to ensure accurate product classification to avoid incorrect VAT treatment and compliance risks. Austria has adopted an amendment to the Austrian VA... Read more
New document was uploaded: E-commerce Austria - Legal requirements
Austria
Author: Ivana Picajkić
This document is a professional presentation and compliance guide prepared by Fiscal Solutions that explains the fiscalization framework and e-commerce regulatory environment in Austria. It provides an overview of Austria’s fiscal cash register system, legal obligations, security requirements, and receipt rules, as well as thresholds and exemptions relevant to businesses. The presentation also clarifies how online sales are treated under Austrian law, highlighting when e-commerce transactions are exempt from fiscalization and when cash-on-delivery scenarios trigger fiscal obligations. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
Austria: VAT Overview 2026
Austria
Author: Ivana Picajkić
Austria applies an EU-aligned VAT system (Umsatzsteuer, USt) with a 20% standard rate, 13% and 10% reduced rates, an upcoming 0% zero-rating for menstrual products and contraceptives from 2026, and strict rules on registration, invoicing, and reporting. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
New document was uploaded: S4FiscalBackoffice Patch
Author: Dejan Šijačić
S4F backoffice patch is intended for users who have already installed S4F backoffice and are intended to update existing installations to latest version. To do so apply only patches that are marked with version number that is newer than your currently installed instance of backoffice. Please make sure to install all available patches sequentially (without skipping). This package contains instruction, release notes, changelog and software packages required for deployment of this software component. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login