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Germany's Restaurant VAT Cut Produces Uneven Price Changes

Higher wage and energy bills absorb much of the relief.

Overview

  • From January 1 the VAT on prepared food fell from 19% to 7%, with beverages still taxed at 19%.
  • Many restaurants report no menu reductions as energy, food costs and the new €13.90 minimum wage narrow the savings.
  • McDonald's cut recommended prices for five popular menus nationwide, and a handful of venues in Munich and Chemnitz announced modest discounts.
  • School and daycare catering shows a split response, with Gourmetta lowering portions by 3–6% while Apetito keeps prices stable.
  • Consumer advocates and several economists describe the move as a subsidy for the sector, and the finance ministry expects roughly €3.5–3.6 billion less revenue in 2026.