Since 1 January 2026, food supplied as part of restaurant and catering services has been subject to the reduced VAT rate of seven percent. Drinks are excluded and are generally taxed at 19 percent. The till and accounting records must keep the two areas separate.
The rule since 2026.
The German Tax Amendment Act 2025 reduced the VAT rate for food in the hospitality sector from 19 to seven percent with effect from 1 January 2026. In addition to restaurants, the German Federal Government names bakeries, butcher shops, catering, and meals provided in nurseries, schools and hospitals.
Drinks are expressly excluded. Many businesses therefore have two separately taxed categories of revenue within the same order.
Seven or 19 percent.
| Supply or service | General VAT rate | Note |
|---|---|---|
| Food served in a restaurant | 7 percent | Reduced since 1 January 2026. |
| Food for collection or delivery | 7 percent | The overall supply may require case-by-case classification. |
| Catering and communal catering | 7 percent on qualifying food | Review drinks and special ancillary services separately. |
| Drinks | 19 percent | Excluded from the relief for catering services. |
Special cases may require more detailed classification. For recurring operations, the tax firm should define once how product groups, bundled offers and ancillary services are treated.
Review the till and product groups.
The tax distinction begins at the till. Every item needs a traceable product group and the professionally defined tax rate assigned there. Newly created items, promotional offers and menus are particularly prone to errors.
- Check food and drink product groups separately.
- Run spot checks on frequently sold items.
- Review bundled offers and package prices separately.
- Check daily closings to ensure both tax-rate groups are reported separately.
- Document changes with the date and responsible person.
Allocate bundled offers in a traceable way.
For a meal sold at a package price, the total price must be allocated between the food and the drink. The Federal Ministry of Finance guidance of 22 December 2025 provides a simplification: for bundled offers containing food and drinks, a drinks portion equal to 30 percent of the package price will not be challenged.
The 30-percent rule is a simplification, not an obligation. If the till records the actual individual prices or another appropriate allocation exists, that method may be used. What matters is that the chosen method remains consistent and traceable.
Consequences for accounting.
Revenue taxed at seven and 19 percent is processed separately. The specific account assignment follows the chart of accounts configured by the tax firm. Generic account numbers from an online guide are not a reliable basis for this.
The same principle applies to purchases. If a supplier document contains different tax rates, the stated net amounts and tax amounts are recorded separately. BuchhaltIQ keeps the receipt, tax-rate groups and open item together in the shared operating record; professional account assignment and tax review remain with the tax firm.
Operational review after the change.
- Run spot checks on all active items and product groups.
- Test at least one realistic receipt containing food and drinks.
- Check bundled offers against the documented allocation method.
- Compare the daily close with the accounting allocation.
- Confirm accounts and special cases once with the tax firm.
The guide One receipt, two VAT rates contains a worked example. The features page describes ongoing cash and receipt processing.
Frequently asked questions.
Does the seven-percent VAT rate also apply to drinks?
No. The statutory relief for restaurant and catering services expressly excludes the supply of drinks. Drinks generally continue to be taxed at 19 percent.
Does the rule also apply to catering?
According to information from the German Federal Government, the relief also covers catering and communal catering. The specific classification of individual services and ancillary services should be agreed with the tax firm for special offerings.
Does the business have to reduce its selling prices?
VAT law determines the tax rate, not the final price. How a business calculates its gross prices remains a commercial decision.
How is a meal deal that includes a drink allocated?
The food and drink portions must be separated in a traceable way. As a simplification for bundled offers containing food and drinks, the Federal Ministry of Finance accepts a drinks portion of 30 percent of the package price. An appropriate allocation based on actual figures remains possible.
Which revenue accounts should I use?
That depends on the chart of accounts and the tax firm's individual setup. The decisive point is to separate revenue cleanly by tax rate. A business should not adopt specific accounts wholesale from an online guide.
Sources.
This guide is not a substitute for tax or legal advice. Coordinate deadlines, data channels and responsibilities with your tax advisory firm.