Permanently low sales tax in the restaurant industry likely

Following in the footsteps of Olaf Scholz, the new Federal Minister of Finance, Christian Lindner, has now also spoken out in favor of deferring the VAT reduction in the catering industry.

In a letter in response to the German Hotel and Restaurant Association, Federal Minister of Finance Christian Lindner has spoken out in favor of a permanent reduction in sales tax in the catering industry. So far, the reduced tax rate of 7 % for meals is limited until the end of 2022. However, during the Bundestag election campaign, the then Federal Finance Minister Olaf Scholz had already declared his support for a deferral of the reduced sales tax in the catering industry. A corresponding change in the law in the course of the year is therefore very likely. However, the reduced sales tax is to be limited to meals, while the full tax rate is to continue to apply to beverages.