Starting from 1 January 2026, Germany will reinstate a 7% VAT rate on restaurants and catering services, excluding the sale of beverages. The measure was included in 2025 Tax Amendment Act as a permanent solution aiming to provide lasting support to the hospitality industries, which are facing continued economic pressure. This will also help to align Germany with neighboring countries, many of which already introduced reduced VAT rates on food services, helping restaurants near borders to remain competitive. The measure also works to simplify the complex VAT distinctions between dine-in and takeaway services.
Update on VAT for restaurants
The change follows the previously temporarily implemented VAT reduction during the COVID-19 pandemic, which was applied as governmental help to support restaurants and catering services in the struggling hospitality industry. In January 2024, the standard VAT rate was reintroduced and, in face of ongoing economic pressures, is now being revisited.
Businesses can find more information in an administrative letter containing clarification on combination offers (e.g. menu including drinks) and restaurant vouchers, which are advised to be switched to multi-purpose ones, enabling customers to benefit from reduced VAT in 2026.
Source:
Tax Amendment Act 2025: Gesetzentwurf der Bundesregierung – Entwurf eines Steueränderungsgesetzes 2025
