Permanent 7% VAT for Gastronomy from 2026; Extended Transition for Public Sector VAT Compliance

• The Bundestag has confirmed a permanent reduction of VAT to 7% for restaurant and catering services (excluding beverages) starting January 1, 2026.
• This VAT reduction aims to support the hospitality sector and boost the economy.
• The transition period for public sector VAT rules (§2b UStG) is extended until December 31, 2026, due to ongoing legal and practical uncertainties.
• Hospitality businesses should prepare for the new VAT rate, while public sector entities should use the extension to resolve legal questions and update their VAT processes.

Source: dlapiper.com

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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