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Germany Boosts Tax Allowances for Coaches, Volunteers, and Commuters; Slashes VAT for Hospitality Food

Tax breaks for coaches and volunteers, plus a VAT cut for hospitality food. The government aims to boost sectors and individuals, despite potential tax losses.

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1 min read
This picture is clicked inside the hotel and in front, we see a table on which white color cloth is...
This picture is clicked inside the hotel and in front, we see a table on which white color cloth is placed. On table, we see plates, fork, spoon, glass, branches of tree. Around the table, we see chairs and behind that we see the other table which is like green in color and behind that, we see a man wearing black blazer. Next to him, we see the girl standing and behind them, we see door on which exit is written on it and behind that door, we see two men standing.

Germany Boosts Tax Allowances for Coaches, Volunteers, and Commuters; Slashes VAT for Hospitality Food

The German government has announced a series of tax changes aimed at supporting various sectors and individuals. Key among these are increases in allowances for coaches, volunteers, and commuters, along with a significant reduction in value-added tax (VAT) for food in the hospitality industry.

Finance Minister Lars Klingbeil (SPD) has confirmed that the federal government will raise the coach's tax-free allowance from 3,000 to 3,300 euros. Meanwhile, the volunteer allowance will also see an increase, from 840 to 960 euros, effective from January.

The hospitality sector will benefit from a permanent reduction in VAT on food from 19% to 7%, starting January 1, 2026. This measure, along with the increase in commuter allowance, was agreed upon in the coalition deal between the Union (CDU/CSU) and SPD. The commuter allowance will rise to 38 cents per kilometer, applicable from the first kilometer.

However, Klingbeil has stated that the government cannot relieve the states from the increased commuter allowance and VAT reduction in the hospitality sector due to potential tax losses amounting to several billion euros for both the federal government and the states.

These changes aim to provide economic support and avoid competitive distortions, particularly in the hospitality sector. The industry is hopeful that the VAT reduction will offer much-needed relief. Despite the potential tax losses, the government remains committed to these measures, as outlined in their coalition agreement.

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