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Germany Cuts VAT on Restaurant Food to 7% From January 1

Rising costs, including a higher minimum wage, are expected to limit price cuts.

Overview

  • The lower rate applies to food consumed in restaurants starting January 1, 2026, while beverages remain taxed at the regular rate.
  • Restaurants are not obligated to reduce prices, and the finance minister has said he will closely watch whether savings reach customers.
  • Industry group DEHOGA and economists warn that higher rents, energy and food prices, and the minimum wage increase to €13.90 will curb pass‑through to diners.
  • Some businesses are sharing the relief: venues in Dresden and Radebeul offer free children’s meals or time‑limited discounts, and Munich’s Saletta sells €100 dining vouchers for €85 through January 31.
  • A Fürth beer hall says it will lower food prices, drawing mixed reactions, while DEHOGA argues the tax cut is critical to safeguard restaurants and jobs after six difficult years.