This temporary regulation expires on December 31, 2023.

Food in restaurants and pubs in Germany will soon become even more expensive. Namely, VAT on meals in hospitality will rise at the turn of the year from the current seven to 19 percent. The German Hotel and Restaurant Association (Dehoga) warns of the “fatal consequences” of this move.

“The tax increase would be fatal for companies, but also for our guests. Restaurants, pubs and cafés will be forced to pass this additional burden on to customers, and every dish will become more expensive. Many will lose guests. Politics must stop this,” said the Dehoga association.

Example: If a schnitzel now costs 18.90 euros, in the future prices above 21 euros can be expected.

There is a risk of reduced sales turnover and the closure of 12,000 establishments.

“Therefore, the tax increase will ultimately not pay off even for the state,” the association says. It is also unfair that food eaten in restaurants is taxed 19 percent more than food that is delivered, as well as food from supermarkets. The reduced rate of seven percent should continue to apply there, writes Fenix Magazin.

The head of the Dehoga association demands equal tax treatment for food, and that the seven percent tax must remain permanent, as has been the case in most EU countries for decades.

As German media write, during the coronavirus pandemic the German government reduced value added tax on food to the reduced rate of seven percent in order to support restaurants, taverns and cafés in difficult times. However, this temporary regulation expires on December 31, 2023.

Pressure on hospitality businesses due to inflation and high energy prices remains enormous, German media report.

Tens of thousands of hospitality businesses have closed their establishments

According to data from the statistics office, in the first quarter of 2023, that is, before the outbreak of the pandemic, sales in hospitality were still 12 percent lower than those in the first quarter of 2019, adjusted for inflation. The number of taxpayers in this sector fell from 222,400 in 2019 to 186,600 in 2021 during the pandemic period.

In addition to energy sources (21.1 percent inflation in April 2023), food became more expensive (17.2 percent). However, personnel costs also increased. According to Dehoga's research, they were 21.5 percent higher in April 2023 than the previous year.

Food will become even more expensive

In the Bundestag Finance Committee, the CDU/CSU request for a permanent tax reduction was rejected in June. The tax reduction would burden the federal budget by around 3.3 billion euros, German media write.

On Saturday, Bavarian Prime Minister Markus Söder (56, CSU) wrote on Twitter: “The reduced VAT in hospitality must remain. Otherwise food will become even more expensive! To do this, VAT on basic food products must be reduced to zero percent. That relieves families.”

Source: poslovni.hr