Since January 1, 2026, German restaurants pay a VAT rate of 7% on meals instead of 19%. On paper, that should lower prices by almost 10%. A Schnitzel that used to cost 16 EUR should now be 14.40 EUR. A Pizza Margherita at 12 EUR should drop to around 10.80 EUR.
If you've eaten out in the past few weeks, that's probably not what you experienced. The menu at your favorite Italian place looks exactly like it did in December. Maybe one or two dishes are 50 cents cheaper, but that's it. And the data confirms exactly that impression.
0.4% Instead of 10%
Pricing analytics firm Meoton analyzed over 200,000 menu prices from more than 30,000 restaurants across Germany. The result: the price index for meals dropped from 100 (December 2025) to 99.6 (mid-February 2026). A decline of 0.4%. Not 10%. Zero point four.
Almost none of the theoretical tax savings reached diners. In theory, a restaurant visit should feel noticeably cheaper. In practice, you can barely tell the difference. The question is: where did the other 9.6 percentage points go?
Why Restaurants Aren't Passing on the Cut
The short answer: because they can't afford to. The longer answer has several parts.
Minimum wage. On the very same day, January 1, 2026, Germany's statutory minimum wage rose from 12.82 to 13.90 EUR. In the restaurant industry, 47% of all employees earn at or near the minimum wage. Nearly every other job. Labor costs are rising sharply, and in an industry where staff is the biggest expense, that hits immediately.
Food and supply costs. Wholesale prices for restaurants have climbed significantly since 2020. Butter, oil, flour, meat: everything costs more than five years ago. These costs don't shrink just because the VAT rate goes down.
Rent and utilities. Commercial real estate in city center locations, especially in Munich, Hamburg, Berlin, and Frankfurt, is expensive. Many businesses spend 15 to 25% of revenue on rent alone. No relief there either.
Energy costs. After the shock of 2022, prices have calmed down but remain above pre-crisis levels. Restaurants with large kitchens and long operating hours feel this especially. On top of that, insurance premiums have risen along with costs for point-of-sale systems, accounting, and hygiene compliance.
Meoton co-founder Christian Haese puts it bluntly: "The VAT reduction is working, but not as a price cut. Rather as a brake against price increases." Without the tax cut, prices would likely have gone up instead of staying flat.
