Overview
- Germany's gastronomy VAT fell from 19% to 7% on January 1, with some chains such as Peter Pane lowering prices on selected items while many independents keep menus steady due to higher food, energy and labor costs.
- Restaurant operators note there is no legal obligation to pass on the cut, with some saying the relief will help stabilize businesses and preserve jobs.
- Austria plans to reduce VAT on selected basic foods from 10% to under 5% from July 1, 2026, yet the final product list is still under negotiation after Vice-Chancellor Andreas Babler floated an uncoordinated draft.
- The Austrian government is considering financing through charges on non-recyclable plastics and duties on parcels from third-country platforms, while the Greens propose ending diesel advantages and reforming company-car taxation.
- Officials plan tighter market checks via the competition authority to ensure pass-through, and economists have urged adding everyday items such as toilet paper to the reduced-tax basket.