For months, the Dehoga restaurant association tried to prevent the return to 19 percent VAT on food in restaurants – without success. According to the association, a survey now shows the consequences.
Since the VAT adjustment on meals in restaurants in January, around half of the catering establishments in Germany have reported fewer guests, according to the industry association Dehoga. Around a third of the catering establishments surveyed stated that the average voucher per guest had been lower since the VAT adjustment, as shown by a Dehoga survey.
During the Corona pandemic, the VAT rate for food in restaurants or cafés was temporarily reduced from 19 to 7 percent to ease the burden on the industry. This exemption was extended several times due to the energy crisis, most recently until the end of 2023. The higher rate of 19 percent has been in effect again since the turn of the year. For beverages, this tax rate has remained the same over the years. According to the association, 3,175 companies took part in the Dehoga Federal Association survey from April 3rd to 12th.
According to the survey, around four out of five of the catering establishments surveyed have increased prices in the past few weeks. “After four years of losses, the massively increased costs left companies no choice but to adjust prices,” said Dehoga President Guido Zöllick. According to the survey, almost two thirds of companies forego investments or reduce their spending in this area due to the VAT adjustment. Almost a third of the companies surveyed shortened their opening hours.
At the end of 2023, Dehoga repeatedly spoke out against a return to the general VAT rate. Zöllick calls for food to be taxed at a uniform rate of seven percent. The association considers the fact that a different tax rate applies to food in restaurants than to take-away food as “absurd”.
According to Dehoga, 45.1 percent of the companies surveyed assume that business will develop worse in the next three months than currently (better: 15.5 percent, unchanged: 39.4 percent). When asked what the biggest challenges are, three quarters of companies cited increasing personnel costs. Adjusting VAT, bureaucracy and rising energy costs were cited as the biggest challenges by around two thirds.
Source: Stern
