Pay taxes on food stamps
VAT on groceries
A VAT rate of 19% is levied in Germany for the majority of products and services. However, this does not apply to most groceries - only a reduced tax rate is due here. Find out what factors affect the level of tax on food.
>> Attention, reduced VAT rate from 7% to 5% by January 1st, 2021! <<<
VAT on food: reasons for the reduced tax rate
According to the consumer advice center in Saxony, most of the food is subject to the reduced tax rate of 7%. Furthermore, three quarters of the discounted items are groceries. Introduced in 1968 for social reasons, the reduced VAT rate was supposed to keep the expenditures for essential necessities within reasonable limits and to relieve low-income households. In particular, this should benefit families, pensioners and low-income recipients, as they spend the majority of their income on everyday goods. The aim was and is therefore to keep basic services affordable for everyone. At the time of its introduction, the reduced tax rate was still 5%, whereas the standard tax rate was 10%. It was only in the middle of this year that some representatives from politics and business advocated setting the tax rate uniformly at 19%.
The reduced VAT rate applies to the following foods:
- Coffee beans, powder
- eggs (but not egg oil or boiled eggs)
VAT on drinks: The following exceptions apply
- If the cocoa, cappuccino, tea or coffee is drawn from the drinks machine ready to drink, the discount does not apply.
- For vegetables and fruits, the tax rate depends on how and whether they have been processed. If these are purchased fresh in the supermarket, they are taxed at a reduced rate. This also applies to jams or smoothies. For normal carrot, orange or apple juices, however, the full tax rate is due.
- 19% is charged for mixed milk beverages, provided that the proportion of milk or milk product in the finished product is below 75%.
The full VAT, on the other hand, is due for mineral water, alcoholic beverages and so-called luxury foods such as oysters, lobster, snails, lobster or caviar, for example. Note: In contrast to mineral water, tap water is taxed at 7%.
- VAT on coffee products is particularly complicated.
Tax rate depends on consumption situation
As a rule, however, the reduced VAT also applies to processed foods such as baked goods, cereal products or ready-to-serve meals. However, the division becomes a bit complicated with dishes that are not consumed in the restaurant but taken away. If, for example, pizza or currywurst is eaten outside the home, the invoice will be issued with a VAT of 7%. If, on the other hand, the dishes are eaten in the pizzeria, cafeteria, company canteen or snack bar, the full tax rate will be charged. The reason: eating on site is seen as a service. This is especially the case when the catering establishment offers its dishes exclusively via a buffet. This does not apply to fast food restaurants that:
- Do not keep any storage devices or tables separate from the sales counter and
- Offer the dish for immediate consumption without putting any packaging on it.
With the application decree of March 20, 2013, the Federal Ministry of Finance has clarified the delimitation of Deliveries and other services for the delivery of food and beverages created. The BMF thus passed the rulings of the ECJ of March 10, 2011 - C-497/09 and others - and the rulings of the BFH of June 8, 2011, XI R 37/08, June 30, 2011, VR 3/07, VR 35 / 08, VR 18/10, October 12, 2011, VR 66/09, and November 23, 2011, XI R 6/08 as well as Council Regulation (EU) No. 282/11 of March 15, 2011 (OJ . EU No. L 77 p. 1) implemented.
Party or catering service
For deliveries by party or catering service the reduced tax rate only applies to the plain mealsunless it is not a tax-privileged food. The regular tax rate is due for the service, such as the delivery and, for example, the provision of dishes (source: zdh.de)
VAT rates for gastronomy and food in the European Union - Information from DEHOGA
VAT on real estate
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