Critical situation in the catering industry: Is there a risk of a return to 19 percent VAT?

Critical situation in the catering industry: Is there a risk of a return to 19 percent VAT?

According to a report by www.swr.de,

VAT in the catering industry could rise again to 19 percent from December 31, 2024, after it was reduced to seven percent in 2020 due to the restrictions caused by the corona pandemic. The catering association DEHOGA fears drastic consequences and has been sounding the alarm for months. Up to 750 restaurants in Rhineland-Palatinate could close due to feared price increases, which accounts for around 10 percent of all catering establishments in the country.

The fear is that prices for customers will reach a critical point that many can no longer afford. Jörg Maier, a restaurateur from Ramsen, shares these fears and shows understanding for customers who no longer want to pay higher prices.

Furthermore, there is uncertainty regarding events that have already been sold in 2024. The consequences of a VAT increase for restaurateurs are currently unforeseeable. Despite an initiative by Mecklenburg-Western Pomerania in the Federal Council, there is still no clear signal from federal politics as to whether there will be a further extension of the reduced VAT rate. These uncertainties could lead to business closures.

The threatened VAT increase could have drastic effects on the catering industry in Rhineland-Palatinate. The feared price increases could deter customers and lead to a decline in sales in many restaurants. Additionally, restaurant closures could lead to increased unemployment in the industry. It is therefore very important that federal policymakers quickly provide clarity about the future level of VAT in the catering industry in order to ensure planning security for companies.