Schwesig doubts passing on the hospitality tax cut to guests

Mecklenburg-Vorpommern's Minister President Manuela Schwesig (SPD) doubts that guests will benefit from the hospitality tax cut.

, and Administrator

2025 December 19 . 6:37 PM

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.

Schwesig doubts passing on the hospitality tax cut to guests

A major VAT cut for restaurant food has been approved by German lawmakers. The change will reduce the tax on on-site prepared meals from 19% to 7% starting 1 January 2026. The move follows months of debate and lobbying from business groups.

The reduction was proposed in the government’s Tax Amendment Act 2025. It passed through the Bundestag on 4 December 2025 before receiving final approval from the Bundesrat on 19 December. Support came largely from the governing coalition of CDU/CSU and SPD, along with industry lobbyists like DEHOGA.

The cut aims to ease pressure on restaurants struggling with rising energy and labour costs. However, many in the sector have already signalled they won’t lower prices for customers. Mecklenburg-Western Pomerania’s state premier, Manuela Schwesig (SPD), has questioned whether diners will actually benefit from the change. The new 7% rate applies only to food prepared and consumed on-site. Drinks, takeaway, and delivery services will remain at the higher 19% VAT.

The VAT reduction takes effect on 1 January 2026. While designed to support hospitality businesses, its impact on consumer prices remains uncertain. Restaurants have faced steep cost increases in recent years, but few have committed to passing savings on to customers.