The federal government has introduced a temporary tax cut for food in restaurants to alleviate the economic consequences of the coronavirus crisis.
According to government officials, the cabinet approved a bill on Wednesday that would lower VAT from 19 percent to 7 percent for a year through June 2021. This only applies to food, not to drinks. In addition, subsidies from all employers for short-time work benefits will be partially exempt from wage tax by the end of 2020. The reduced income from the tax relief is estimated at around 2.7 billion euros in the Reuters draft.
State Secretary Sarah Ryglewski (SPD) said that the tax cut would mean a huge boost for restaurants and restaurants if they could open again: “The sales tax cut on food will help the catering industry to get started after the corona lockdown.”
