VAT in Gastronomy 2026: 7% or 19%?
Since 1 January 2026 food is permanently taxed at 7% in Germany — on the premises, to take away and delivered. What applies to drinks, how to split combo offers, and what your POS has to do.
The question “7% or 19%?” changed fundamentally for German hospitality on 1 January 2026. On 19 December 2025 the Bundesrat passed the permanent reduction of VAT on food. Since then: food is taxed at 7% — on the premises, to take away and delivered alike. The decades-old distinction between a restaurant service and a takeaway sale no longer decides the rate on a dish.
What remains is the line between food and drink. What is new is the job of carrying the change through your POS cleanly — including backwards, because a receipt from 2025 still has to show the rate it was billed at.
What applies since 1 January 2026
- 7% VAT on food, regardless of where and how it is handed over: eaten in, collected, delivered.
- 19% VAT on drinks, likewise regardless of where they are handed over.
The reduction is written into the VAT Act and carries no end date. Unlike the pandemic measure, which expired on 31 December 2023, there is nothing to plan around this time.
For businesses with seating this is the change you feel: a main course that still showed 19% on the receipt in December 2025 has been printed at 7% since January 2026.
The rates over time
| Period | Food eaten in | Food to go | Drinks |
|---|---|---|---|
| until 30/06/2020 | 19% | 7% | 19% |
| 01/07/2020 – 31/12/2023 | 7% | 7% | 19% |
| 01/01/2024 – 31/12/2025 | 19% | 7% | 19% |
| since 01/01/2026 | 7% | 7% | 19% |
That table is not nostalgia, it is a requirement on your POS: a transaction has to reproduce the rate that applied when the sale happened. A system that stores the rate as a fixed number on the item and simply overwrites it at a changeover loses that history — and a receipt reprinted later no longer matches the booking the tax office sees.
Drinks: still 19%
Nothing changes for drinks. Alcohol, soft drinks, coffee and tea are subject to the standard rate of 19%, on the premises and to go.
Exceptions: milk, milk-mixed drinks containing at least 75% cow’s milk, and tap water are taxed at 7% — but only as a delivery or to take away. Served in the restaurant they are a restaurant service on a beverage, and back at 19%. The cappuccino you take with you is reduced-rate; the same cappuccino at the counter is not. Plant drinks (oat, soy, almond) do not count as milk and stay at 19% either way, as does bottled mineral water.
After the reform this is the only case where the order type still moves the rate — and the only reason the “eat in / takeaway” switch still does anything for VAT at all.
The dividing line in the register is therefore a different one today: no longer “eat in or take away” but “food or drink”. Anyone maintaining their items by tax category got through this changeover without touching a single article.
Combo offers: splitting is still mandatory
A menu of food plus a drink still contains two rates. The method the tax authorities accept is apportionment by the ratio of the individual prices: the food share at 7%, the drink share at 19%.
What did get simpler: the split is now identical for delivery, collection and eating in. A lunch menu carries the same VAT breakdown whether it is served at the table or packed up.
What your POS has to do now
The TSE requirement has applied since 1 January 2020: every transaction is logged tamper-proof, including its rates. For the 2026 changeover that means:
- The rate belongs to the category, not to the item. An article filed as “food” or “drink” follows a change in the law automatically. An article with “19.00” typed onto it stays at 19% until somebody edits it by hand.
- Past transactions stay untouched. A receipt from 2025 was signed at 19% and has to remain that way in the archive. Correcting master data must never reach into closed periods.
- The receipt shows the split, sorted by rate — the basis for the DSFinV-K export and the VAT return.
- The order type stays on the receipt even though it no longer decides the rate. It is part of the record and is reported separately.
A pizzeria owner in the Rhine-Main area describes why this is not a detail: “For years we booked every delivery order as standard revenue without separating anything. Only when we switched systems did it come out that the 7% turnover was nowhere properly shown. That could have ended badly in an audit.”
Common mistakes after the changeover
1. Items with a hard-coded rate The most common error after 1 January 2026: food still running at 19% because the rate sits on the item and follows no category. Check your item list for positions without a tax category.
2. Drinks moved to 7% as well The reduction covers food, not the whole range. Anyone who set everything to 7% is declaring too little VAT — and is liable for it.
3. Combo offers not split A menu sold at a flat price with no split between food and drink is still a faulty position, and it adds up with volume.
4. Retroactive edits to closed periods “Tidying up” old rates is not a correction, it is a breach of the requirement that records be unalterable. Errors in periods already closed belong with your tax adviser, not in master data maintenance.
Recommendations for 2026
- Check your item master data: does every article carry a tax category (food, drink, alcoholic drink)? The items without one are exactly the items a change in the law cannot reach.
- Spot-check receipts: are 7% and 19% shown separately, and do the totals match the daily close?
- Decide on prices deliberately: at an unchanged gross price the reduction raises your margin. Whether you pass it on is a business decision — but it should be a decision, not something that happens by default.
- Involve your tax adviser, particularly where transactions around the turn of the year were booked at both rates.
- Watch for software updates: your POS vendor should roll out a rate change without you touching every article. If they don’t, that is the real problem.
VAT in German hospitality got considerably simpler in 2026. What remains is the requirement for a POS that derives the rate from what an item is — and that keeps the history for the next time the law moves.
