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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
| 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 & Neveux 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).