The German catering industry will benefit from a permanent VAT reduction to 7 percent from 2026, while at the same time planned transparency requirements such as the Berlin hygiene traffic light will be canceled.
The German catering industry will experience a turning point in 2026: While the permanent VAT reduction to 7 percent will provide massive financial relief, the planned hygiene transparency will be scaled back at the same time. This dual strategy of tax relief and deregulation is intended to stabilize the ailing sector – but consumer advocates are sounding the alarm.
Historic step: The 7 percent VAT is back
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It has been in effect again permanently since January 1, 2026: the reduced VAT of 7 percent on food. The Federal Council decided to change the law in mid-December 2025, thus ending a decades-long patchwork. In the future, both restaurant visits and takeaway meals will be taxed uniformly.
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For the industry, this means historical planning security. “This ends almost six decades of unequal taxation,” comments the German Hotel and Restaurant Association (DEHOGA). In times of high operating costs and rising minimum wages, tax relief comes at exactly the right time. It is intended to cushion extreme price increases and enable investments in personnel and infrastructure.
Berlin’s about-face: The “hygiene traffic light” is canceled
Parallel to the financial relief, a regulatory change is taking place. The plan is happening in Berlin “Clean Kitchen Law” deleted. It would have obliged catering establishments to publicly display the results of official hygiene controls via a color scale – a so-called hygiene traffic light.
The Berlin Senate’s justification: The bureaucratic effort would be too high. Chronic understaffed food inspection offices would be hindered rather than relieved by additional administrative hurdles. The new restaurant law, which is due to come into force in 2026, is therefore based on reducing bureaucracy instead of requiring transparency.
Consumer protection vs. economic development
The rejection of the hygiene traffic light sparks a fundamental dispute. Consumer protection organizations such as Foodwatch speak of a “massive setback for civil rights”. Guests have a fundamental right to know under what hygienic conditions their food is prepared.
The catering industry, on the other hand, argues that such public pillorying is unfair. With health authorities thin on staff, a company with a poor rating could wait months for a follow-up inspection – even if it corrects the deficiencies immediately. During this time there is a risk of irreparable damage to the company’s image. The industry emphasizes that food safety is a top priority, but it belongs in the hands of the authorities, not at the door.
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Interim assessment: Stabilization at any price?
The parallel developments show a clear economic policy line. After the pandemic, inflation and staff shortages, the state is relying on stabilization through relief in 2026. The tax cut noticeably improves the companies’ margins. At the same time, the reduction of bureaucratic hurdles – as demonstrated in Berlin – reduces the administrative burden for companies and authorities.
But experts also see risks. If there are no state-mandatory transparency instruments, the industry will have to rely more on self-regulation. Voluntary hygiene certificates and independent audits could become a competitive advantage in the future, especially in the catering industry and upscale segments. The key question is: Can the sector maintain public trust without external controls?
What’s coming in 2026?
The implementation phase now begins for the catering industry. Cash register systems have to be adjusted and price calculations have to be revised. Tax advisors urge care, especially when dealing with vouchers issued before 2026.
Berlin could set a precedent in terms of regulation. If it becomes apparent that bureaucracy can be reduced without endangering food safety, other federal states could abandon their own transparency plans. 2026 will be a year of consolidation – provided that the industry uses the air obtained to guarantee high hygiene standards on its own.
