Germany: Reduced VAT in the hospitality industry and no end in sight

• The German Bundestag has confirmed the extension of the reduced VAT rate in the hospitality industry from 1 January 2024.
• The hospitality industry is eagerly awaiting a permanent extension of the VAT reduction beyond 31 December 2023.
• The extension is sought to restore international competitiveness, secure the existence of thousands of gastronomy businesses, and protect consumers from price increases.
• Opposition proposals for permanent extension were rejected, and the issue has been raised again in the Bundesrat by the states of Mecklenburg-Vorpommern and Saxony-Anhalt.
• The Bundesrat is calling on the federal government to extend the VAT reduction beyond 2023, initially until 31 December 2025, to avoid additional price increases and demand declines.
• The state of Saxony is also calling for a comprehensive VAT reform to simplify and streamline the existing system.
• The Bundesfinanzminister will make the extension dependent on the outcome of the November tax estimate.
• Time is running out, and a comprehensive reform of the VAT system is a long-term goal that may be addressed in the next legislative period.
• The pressure from associations, the Bundestag, and the states is increasing, and the federal government should no longer refuse the proposal.

Source: nwb-experten-blog.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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