From January 1st: VAT rate for food increases to 19 percent in restaurants - financial expert provides information about exceptions

From January 1st: VAT rate for food increases to 19 percent in restaurants - financial expert provides information about exceptions

According to a report by web.de, from January 1st the VAT rate on food in restaurants will rise from 7 to 19 percent. This is expected to result in higher costs for diners. However, there are exceptions: The reduced rate of 7 percent remains in effect for food that is either taken away for consumption on the go, eaten at a makeshift snack table in front of the store or ordered home. However, luxury products such as lobster or caviar are exempt from this regulation.

There is still no reduced VAT rate for drinks. Anyone who consumes drinks with their take-away meal or delivery will continue to pay 19 percent VAT. Restaurants and fast food outlets must also make this distinction on the bill.

The reduction in the VAT rate on food in the catering industry from 19 to 7 percent during the Corona pandemic is now expiring. This change is likely to affect both consumers and restaurants as restaurant food prices are expected to increase.

As a financial professional, it is important to note that this change could have an impact on consumer spending habits. The higher cost of dining out could lead consumers to eat out less and instead cook more at home or consider cheaper alternatives. As a result, certain restaurant chains could see a loss in sales while supermarkets or delivery services could benefit.

The impact on the overall market and the financial industry depends on how consumers react to the price increases. It remains to be seen whether the restaurant industry will develop strategies to compensate for the price increase and maintain customer loyalty.