German restaurants largely retain reduced VAT, prices unchanged

In January the German government cut the value‑added tax on restaurant meals from 19 % to 7 %. A survey of about 2,000 hospitality businesses by the German Hotel and Restaurant Association (DEHOGA) found that 73.4 % of establishments kept their menu prices unchanged, with only a small minority lowering or raising them. Restaurant owners cite rising labour costs, higher minimum wages and increasing food prices – for example, Amritvir Singh Dillon in Wermelskirchen says his butter chicken and chicken tikka masala remain at €18.90 each despite higher costs for rapeseed oil and staff. Conversely, Mike Henning in Hagen reduced the price of every main dish by €1, hoping to attract more customers. The reduced VAT rate helped limit overall price increases, but most German diners have not benefited directly from the tax cut.