New developments of fast food tax in Germany

Source: Nicole Kirbach¸ PKF Malta

Germany wants to change confusing laws that subject fast food stands to divergent amounts of tax depending on whether their customers sit or stand to eat.

Most foods in Germany are covered with the reduced rate of seven percent. This includes basic foods like fruit and vegetables¸ milk and dairy products¸ meat¸ fish¸ eggs¸ honey and cereals and bakery products. However¸ drinks¸ whether alcoholic or non-alcoholic¸ are excluded from the discount and therefore customers have to pay 19%. For example¸ although carrots are taxed at a rate of seven percent¸ the tax rate for carrot juice is 19%. This is also true for milkshakes¸ when the amount of milk or milk product in the finished product is below 75 percent. Drinking water from the tap is also reduced¸ but not bottled water and will be taxed at 19 percent.

The tax rate on food is also linked to the consumption situation. To date¸ in a restaurant¸ school or college canteen there is a general tax rate of 19 percent. Reason: This is a service. Likewise¸ 19 percent tax applies to coffee¸ tea and cocoa¸ which are drawn ready to drink’ from vending machines. But ‘food delivery’ is one of 50 categories that qualifies for Germany’s reduced tax rate. Many restaurateurs make a mixed calculation¸ so they do not have to determine different prices.

But the finance ministry intends to change the current tax laws. In the future¸ the ministry plans to levy the