Gastronomy in crisis: Lower VAT only valid until December 31, 2023

Gastronomy in crisis: Lower VAT only valid until December 31, 2023

In the wake of the corona pandemic, the catering industry suffered greatly, so many restaurants were closed. In order to prevent further losses, a lower VAT of currently seven instead of 19 percent was introduced for the entire industry.

This was originally only supposed to apply until July 30, 2021, but was extended several times by the coalition committee. The new deadline is currently December 31, 2023.

This means that from January 2024 the regular rate of 19 percent may apply again to all catering businesses. Added to this are the increased energy and food prices since the start of the Ukraine war.

The German Hotel and Restaurant Association e. V. (DEHOGA) complains that the additional costs of the tax increase would have to be passed on 1:1 to the guests, as there would then be no more reserves.

A permanent reduction in VAT is currently being discussed in the Bundestag - but until a decision is made, restaurateurs are in the dark.

How www.chip.de reports, the catering industry in Germany has suffered greatly since the beginning of the corona pandemic. Many restaurants had to close due to the lockdown measures, which led to a significant loss of sales. In order to support the industry and prevent further losses, the VAT for catering establishments was temporarily reduced from 19 to seven percent.

Originally, this VAT reduction was only supposed to apply until July 30, 2021. However, the coalition committee has decided on several extensions and set the current deadline of December 31, 2023. From January 2024 there is a possibility that the regular VAT rate of 19 percent will come into force again. This potential tax increase comes on top of already increased energy and food prices since the start of the Ukraine war, further increasing the financial burden on restaurateurs.

The German Hotel and Restaurant Association e. V. (DEHOGA) warns that the additional costs of the tax increase must be passed on in full to the guests, as many businesses no longer have any reserves. This could lead to significantly higher prices in restaurants and pubs, which in turn could affect demand and sales.

A permanent reduction in VAT for the catering industry is currently being discussed in the Bundestag. However, a final decision is still pending, which continues to leave restaurateurs in the dark.