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German Cabinet Approves COVID-19 VAT Cut For Catering

Friday, May 15, 2020

On May 6, 2020, the German Cabinet adopted the draft Coronavirus Tax Assistance Act, which provides for a temporary reduction in value-added tax on food served in catering outlets.

Currently, food supplied for consumption on catering premises is subject to VAT at the 19 percent standard rate, while supplies of takeaway food are taxed at the seven percent reduced rate.

Under the draft law, food supplied in restaurants, cafes, and similar outlets will be taxed at the seven percent reduced rate.

The measure is intended to apply from July 1, 2020, until June 30, 2021.