Overview
- The federal plan would cut VAT on restaurant meals to 7%, raise the commuter allowance from the first kilometer, and increase the Ehrenamtspauschale.
- The Bundesrat has flagged tax revenue losses for 2026–2030 of about €11.2 billion for Länder and €1.4 billion for municipalities.
- Several state governments are demanding compensation or for the federal government to shoulder the full fiscal impact.
- Lars Klingbeil says there will be no federal compensation and warns that refusal by some Länder could derail the relief measures.
- The bill now moves to the Bundestag, then requires Bundesrat consent, with a planned start date of January 1, 2026 at risk if no deal is reached.