7 % for food: VAT reduction in the gastronomy sector from 2026

Since January 1, 2026, a reduced VAT rate of 7 % applies again to food in the gastronomy sector. Beverages, however, continue to be excluded from the reduced rate and are therefore generally subject to the standard rate of 19 %. As a result, the practical focus has shifted: the previous distinction between “on-site consumption” and “takeaway” is now secondary. What matters going forward is only the distinction between food (7 %) and beverages (19 %).

Which problem areas can occur?

1. VAT simplification rules for combined prices

In gastronomy, food and beverages are often bundled under one total price (e.g., buffets, menus with beverage packages, all-inclusive). In such cases, the payment must generally be divided based on the simplest allocation method. In practice, this is usually done by allocating according to the respective individual sale prices.

Continuing from the simplification rule that applied up to December 31, 2023, it will not be objected to if the beverage share is simply set at 30 % of the total price.

This also affects the hotel industry when combined “business packages” are offered, where reduced VAT accommodation services are bundled with non-reduced services (e.g., breakfast, sauna, parking) at a single total price. Previously, it was permissible for simplification to allocate 20 % of the total price to non-reduced services. Under the new VAT reduction for food, a 15 % allocation to non-reduced services will not be objected to.

2. Vouchers

It is important to distinguish whether a voucher issued is a single-purpose voucher or a multi-purpose voucher.

• For classic multi-purpose vouchers (e.g., value vouchers redeemable in a restaurant, allowing choice of on-site or takeaway): no VAT is incurred upon issue. VAT is applied upon redemption in 2026, and then allocated between food (7 %) and beverages (19 %).
• With single-purpose vouchers, where, for example, in 2025 a voucher was issued specifically for an on-site dining experience: VAT was charged at the standard rate of 19 % upon issue. Redeeming that voucher in 2026 does not lead to a retrospective change in the VAT treatment from 2025. Any additional payment upon redemption will be allocated to food (7 %) and beverages (19 %).

Under the new rules, restaurant value vouchers intended solely for on-site consumption will usually be treated as multi-purpose vouchers. 

3. Advance payments

Advance payments made in 2025 for restaurant services delivered in 2026 are subject to the standard VAT rate of 19 % at the time of the advance payment in 2025. When the service is performed in 2026, the final invoice will reflect the VAT applicable in 2026, and the advance payment may be corrected on the final bill.

How does the gastronomy sector really benefit from the VAT reduction?

Between the passage of the law and its actual implementation in daily business operations, there is limited time. Against this backdrop, it is essential to identify potential pitfalls in operation early on.

At the same time, the legal changes must be implemented immediately in the systems used (e.g., POS systems) and in procedural documentation in order to avoid errors in accounting and any presumptive assessments by tax authorities.

Short and compact: Your action plan around the VAT reduction

Distinguish between food and beverages now.
Review your entire product range. Note that in rare cases beverages may qualify for the reduced rate as well.

Configure your POS/cash register systems correctly.
Define clear item groups and product names; generic names like “various foods” or “various beverages” will not be accepted. Ensure VAT codes are correctly assigned.

Ensure accurate invoice information.
Check outgoing invoices for correctness so that your customers can benefit from the correct input tax deduction. Pay particular attention to assigning the correct VAT rates.

Be careful with combined prices.
Consider whether in your specific case it is more advantageous to allocate shares based on the ratio of individual sale prices or using permissible flat allocation percentages.

Conclusiong

The devil is in the details when it comes to the VAT reduction from 19 % to 7 % for food. To truly benefit from the intended relief for the gastronomy and hotel industries, the adjustment of VAT rates in isolation is not enough — a variety of additional operational and accounting aspects must be taken into account.

If you have questions or need advice tailored to your business, feel free to contact our specialists.

Comprehensive support, including POS audits under real conditions, can help ensure compliance with the new VAT rules. The main focus will be on the changed legal framework effective January 1, 2026. In addition, other classic audit areas will be covered, from which tax auditors frequently derive an unavoidable right to estimate. Proper cash register management is the best way to effectively prevent this.

If you have any questions or require advice, please feel free to contact us. Schedule an individual consultation appointment with us.