From 1 July 2026, VAT on certain basic foodstuffs will be reduced from 10% to 4.9%. This measure is expected to save households around EUR 100 a year. The change applies to a range of specified food items:
- Fresh hen eggs
- Butter
- Milk
- Yoghurt
- edible fruits
- Vegetables (fresh, chilled, frozen)
- Rice
- Wheat flour and semolina
- Bread
- Pasta (uncooked and unfilled)
- Table salt
Not eligible
It is important to note that not all foodstuffs fall under this regulation. Some products such as meat, poultry, cheese, sugar and honey are explicitly excluded.
When classifying foodstuffs in the Combined Nomenclature, it is important to carefully check whether they fall into the preferential category. For example, some products such as maize, bananas, citrus fruits and berries are not preferential. Likewise, certain plant-based products such as rye flour, rolled oats and vegetable oils are not preferential.
Composite foods
When several food items are combined to form a new product, such as a sausage roll, the entire product is subject to the higher tax rate of 10%. This also applies when two eligible products, such as bread and butter, are combined to form a new product such as a butter roll (as it is no longer one (is affected by a favoured foodstuff).
Restaurant/Catering
It is also important to note that the reduced tax rate does not apply to sales in restaurants (which includes a standing table in a bakery) or catering. So, if a baker sells a bread roll for consumption at a standing table in their premises, the total supply is subject to the higher tax rate of 10%.
Our recommendation
The legislative change will have significant implications for affected businesses. They will need to check every food item for its correct classification in the Combined Nomenclature and adjust their cash registers to reflect the new tax rate. It is advisable to start addressing these adjustments now to ensure all necessary steps are completed by the time the legislative change comes into effect on 1 July 2026!
FAQs with further details can be found on the Website of the BMF.
Source: BMF
Status: 01.06.206
Photo: Kaboom Pics
