Schleswig-Holstein Pushes VAT Reduction on Restaurant Food Despite Green Opposition

Schleswig-Holstein's Minister-President Daniel Günther (CDU) is preparing for a pivotal Bundesrat vote on the Steueränderungsgesetz 2025, which includes a proposal to reduce the value-added tax (VAT) on restaurant food from 19% to 7%, effective January 1, 2026. This tax reform aims to ease costs for the hospitality sector in the federal state, emphasizing its importance as a "Flächenland" (a region with large spatial dimensions) that benefits from such changes. However, the Greens had earlier opposed the move, citing concerns over a potential 50 million euro revenue loss annually for the state and municipalities in Schleswig-Holstein. Despite their reservations, the coalition backing the tax cut has shifted strategy to support the measure, aiming to avoid contentious debates within the Landtag and respond to opposition demands for clearer communication from Günther’s coalition. The Bundesrat’s approval is now critical following the Bundestag’s prior agreement, marking a significant advance for this tax reform initiative in Schleswig-Holstein.