Germany extends COVID 7% restaurant VAT rate to Dec 2022

The ruling parties of the German coalition have agreed this week to extend the temporary VAT rate cut for the restaurant sector until December 2022. The current reduction from the standard 19% to the 7% reduced rate was introduced from July 2020 until 30 June 2021 to support the restaurant and catering services sector during the COVID crisis.

Germany cut its VAT rate from 19% to 16% for the second half of 2020. Check Avalara’s COVID-19 VAT measures tracker.

The extension has been provided since the industry has not been able to benefit from the tax relief as lockdown measures has kept customers away.

Germany is also introducing other economic support measures, including a family child bonus of €150