GSB 7.1 Standardlösung

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Food taxation

Food taxation is based on the statutory value added tax (VAT) rate for food and beverages in Germany and affects the food prices. Due to the fact that the food prices can influence the purchasing behaviour, in particular of people, who are worse off financially (Kersting et al. 2007; Rao et al. 2013), the taxation for selected food groups described in connection with the type 2 diabetes risk (Schwingshackl et al. 2017) is presented. Due to the taxation of food according to its health value, the food price can be changed and the health of the population can thus potentially be influenced (Blakely et al. 2020; Eyles et al., 2012; Schönbach et al. 2019; Tönnies et al. 2021).

Key messages

  • In Germany, the reduced VAT rate of 7% applies for all food since 1990.
  • The VAT rate for beverages has risen continuously since 1990 from 14% to 19%.
  • The taxation of food and beverages in Germany does not differentiate food regarding to the health value.

Trend

Tax burden in cents per 100 cents
Category 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Beverages (e.g. mineral water) 14 14 14 15 15 15 15 15 16 16 16 16 16 16 16 16 16 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19
Food (e.g. fruits and vegetables) 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7

Result

The reduced VAT rate of 7% applies in Germany since 1990 for all food, including fruit, vegetables, and meat products (§12 Abs. 2 UStG 2005). In contrast, the general VAT rate applies for beverages, including mineral water, fruit juices, and sugar-sweetened beverages. The general VAT rate has risen continuously in Germany in the last 30 years from 14% to 19%. The last increase occurred in 2007. Between July and December 2020, the general VAT rate was lowered to 16% for a limited time (Zweites Corona-Steuerhilfegesetz 2020). The general as well as the reduced VAT rate are independent of the composition and the health value of the beverages and food.

Conclusion

The taxation of food and beverages in Germany does not consider the health value of the food. Food and beverages, which contribute to a balanced diet, thus do not differ from food and beverages, which increase the type 2 diabetes risk, in terms of their VAT rate. In some European countries, such as the United Kingdom, France, and Hungary, sugar-sweetened beverages, among others, are taxed in order to reduce their consumption (Brinsden et al. 2019; Rogers et al. 2023). The evidence for the effectiveness of such measures is not yet clear (Andreyeva et al. 2022; Itria et al. 2021; Powell et al. 2012; Teng et al. 2019), but organisations, such as the Deutsche Diabetes Hilfe and the Deutsche Allianz Nichtübertragbare Krankheiten (DANK) as well as WHO have already been suggesting the taxation of beverages, which contain sugar, and the elimination of the VAT for fruit and vegetables since 2007 (diabetesDE & Deutsche Diabetes Hilfe 2022; WHO 2022).

Show more information on methodology and data sources

Definition

The indicator food taxation is reported separately for food and beverages and is defined as tax burden in cent per 100 cent food or beverage price, respectively.

Reference

Based on law applicable throughout Germany.

Data source

VAT Act (UStG) according to the announcement of February 21, 2005, last changed by Article 3 of the act of June 29, 2020 (§12 Abs. 2 UStG 2005; Zweites Corona-Steuerhilfegesetz 2020).

Calculation

  • Description: General and reduced VAT rate in Germany since 1990.

Data quality

The VAT Act provides information relating to the VAT collected in Germany.