Coalition agreement: Reduced VAT rate in the gastronomy sector

• Cash registers in gastronomy must be programmed in good time so that the new VAT rate is applied from 1 January 2026.
• Although this VAT rate reduction only applies to food, not all drinks are automatically subject to the standard VAT rate of 19%. For example, mixed milk drinks with a milk content of at least 75% are taxed at a reduced rate as before.
• What is less common in restaurants is more common among caterers: Advance payments. In this case, VAT is incurred when the payment is received at the VAT rate applicable at that time. If a different VAT rate applies at the time the supply is provided, it must be corrected. It is possible that the Federal Ministry of Finance will issue simplification rules here, which remains to be seen. However, it is not unlikely that the simplification rules will be applied again in accordance with the circular letter of 30 June 2020 on the temporary reduction of the general and reduced VAT rate as of 1 July 2020.
• Restaurant and catering supplies on New Year's Eve may be difficult to assess with regard to the time of performance. However, in the aforementioned circular letter dated 30 June 2020, the reduced VAT rates could already be applied - during the night from 30 June 2020 to 1 July 2020.
• Restaurant vouchers that are purchased before 1 January 2026 but only redeemed after this date should be examined in particular: In the case of single-purpose vouchers, which are taxed immediately, the VAT rate applicable in 2025 applies. In the case of multi-purpose vouchers, the VAT only accrues when the voucher is redeemed at the then applicable VAT rate.

Author: Nadia Schulte