The operators of several catering chains expect the planned reduction VAT There are no falling prices for customers to seven percent in their industry. Chains such as Kentucky Fried Chicken, Burger King, Nordsee and L’Osteria cite increased costs for personnel and food as the reason. The tax cut simply offsets their own increased costs, they argue. The German Hotel and Restaurant Association (Dehoga) made a similar statement and described the tax cut as “the most important measure to secure the future of restaurants, taverns and cafés”.
If the Tax cut As planned, “we will be able to do without a broad price increase,” wrote the pizza chain L’Osteria. Burger King also says it is only planning to “stabilize existing prices”. Kentucky Fried Chicken at least said that “selective price reductions were conceivable.” According to its own information, the Nordsee chain is planning individual discounts, but said that a “blanket price reduction across the entire range to the extent of the VAT reduction” was “not possible”.
McDonald’s wanted to make a statement with reference to the pending vote Federal Council have not yet commented specifically on the topic. The Block House steakhouse chain referred to Dehoga.
Tax cuts were not expected
According to experts, this was to be expected. “Tax cuts are generally passed on to consumers to a lower extent than tax increases,” said Professor of Economics Matthias Firgo from the Munich University of Applied Sciences. “I therefore do not expect prices to fall noticeably. Rather, it is to be expected that price increases will slow down.” When in 2024 the VAT on food in the gastronomy was raised again, around 70 percent of this would have been passed on to customers.
The VAT reduction on food in restaurants is set to fall from 19 to 7 percent at the turn of the year. The Bundestag voted for the tax cut agreed by the Union and SPD in their coalition agreementthe Federal Council will discuss on Friday. With the reduction, the federal government is returning to the tax rate that already applied during the corona pandemic. 2024 was the federal government initially returned to the old tax rate of 19 percent.
Critics point out that the measure is expensive: According to the Federal Ministry of Finance, the tax losses would amount to 3.6 billion euros in 2026 alone. The federal states expect losses of 11.2 billion euros, the municipalities with 1.4 billion euros.
The German hospitality industry generated 2.1 percent more sales in October than in September, after this had fallen significantly in the previous month. A year-on-year comparison also shows the sometimes significant price increases in the industry. Nevertheless, sales fell by 0.9 percent compared to the same month last year.
