Austria plans to reduce VAT on selected essential food products from 10% to 4.9% from July 1, 2026, aiming to lower grocery costs, ease household pressure, and support anti-inflation measures while the exact product list is still pending.
Reminder: Austria to Reduce VAT on Essential Food from July 2026
Public
Austria
Author: Ivana Picajkić
Category:
Fiscal subject related
General information
Views:
2052
Content accuracy validation date:
25.05.2026
Content accuracy validation time:
08:14h
Austria is preparing to reduce VAT on selected essential food products from 10% to 4.9% starting July 1, 2026. The measure is part of the government’s broader plan to reduce inflation and ease the financial pressure on households.
The reform was confirmed in January 2026, as food prices and everyday shopping costs remain a concern for consumers. By lowering VAT on a selected basket of basic food items, the government aims to make essential groceries cheaper and provide direct relief at the checkout.
The exact list of products that will benefit from the reduced VAT rate has not yet been published. This will be important for retailers, suppliers, and VAT compliance systems, because the correct VAT rate will depend on precise product classification.
The VAT cut is expected to be funded through other measures, including a planned tax on non-recyclable plastics and fees on parcels imported from third countries, such as China. The government says this should help balance the budget while also supporting Austrian retailers that compete with low-value imported goods.
Similar VAT reductions on food have also been discussed or announced in Sweden and Denmark, showing a wider European trend of using tax measures to respond to high living costs.
Overall, the planned Austrian VAT reduction is intended to lower the cost of basic groceries, support households, and help bring inflation closer to the government’s target.
Other news from Austria
New webinar was uploaded: Recorded webinar: Evolution of Fiscalization:From fiscal printers to real-time data platforms
Author: Dušan Bučevac
Fiscalization has transformed from a compliance tool reliant on hardware to dynamic, software-driven platforms linking businesses and tax authorities. The webinar was presented by Dušan Bučevac, Sales Manager at Fiscal Solutions, who covered crucial fiscalization milestones and explained how real-time data has reshaped compliance, transparency, and business decision-making. Read more
Subscribe to get access to the latest news, documents, webinars and educations.
Already subscriber? Login
Austria Plans Tax Office Restructure from January 2027
Public
Austria
Author: Ivana Picajkić
Austria
Author: Ivana Picajkić
Austria will reorganise its Tax Office by January 1, 2027, establishing 22 general offices and one nationwide office to improve management and flexibility for efficient tax administration. Austria plans to reorganise its Tax Office from January 1, 2027. The Austrian Federal Ministry of Finance announced that the structure of the Austrian Tax Office will be changed to better meet current operation... Read more
Austria Moves Forward with the VAT Cut on Essential Food from July 2026
Public
Austria
Author: Ivana Picajkić
Austria
Author: Ivana Picajkić
Austria plans to reduce VAT on selected basic food products from 10% to 4.9% from July 1, 2026, aiming to lower grocery prices and support consumers amid inflation. Austria is moving forward with a VAT reduction on selected basic food products to help households cope with high grocery prices. From July 1, 2026, the VAT rate on certain essential foods is expected to fall from 10% to 4.9%. The Aust... Read more
Austria Proposes New Parcel Tax for Large Online Retailers
Public
Austria
Author: Ivana Picajkić
Austria
Author: Ivana Picajkić
Austria is consulting on a draft Parcel Tax Act that would impose a €2 tax on domestic online shopping deliveries by large retailers and platforms from late 2026, with quarterly reporting through FinanzOnline, and the measure is intended to help fund planned food VAT reductions and support local, sustainable shopping. Austria is consulting on a draft law that would introduce a new parcel tax on do... Read more
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