According to a report in Bild newspaper, the finance ministry intends to change the current tax laws, which subject fast food sellers to 19 percent value added tax if their customers eat while seated, and only seven percent if customers eat while standing.
In the future, the ministry plans to just levy the seven percent rate.
Traditionally, ‘restaurant services’ are taxed at the standard 19 percent tax rate, but ‘food delivery’ is one of 50 categories that qualifies for Germany’s reduced tax rate.
Last year Germany’s top financial court ruled that fast food qualified as ‘food delivery’ – and the corresponding lower tax rate – if patrons ate their sausages or fries while standing.
The decision followed an earlier one by the European Court of Justice in Luxembourg, which ruled that popcorn and nachos served in cinemas must be taxed at the reduced rate of seven percent – insisting they fell under the category of food delivery. This was true, said the court, even if the items were heated.
Germany’s finance ministry is set to discuss changing the law sometime in September, Bild reported.
The reduced tax rate was originally introduced to prevent basic necessities from becoming too expensive for the poor, but the list of exceptions has since grown to include things like hotel stays and theatre tickets.
However, grocery products like meat, milk, coffee still make up the largest category of products taxed at the reduced rate.