Jun
Austria intends to lower the VAT rate to 4.9% for essential food products
Who this will interest: businesses selling food items in Austria.
Key point(s): Austria will lower the VAT rate on certain “essential” food products from 10% to 4.9% starting 1 July 2026.
Action points: Businesses should check if their goods can benefit from the reduced rate and prepare for the reduction in the VAT rate.
In detail
The Austrian Parliament has approved a draft of a new law which intends to lower the VAT rate on certain food items from 10% to 4.9% starting 1 July 2026. The selected items include:
- milk, including lactose-free milk;
- yoghurt;
- butter;
- vegetables, fresh or chilled;
- vegetables, frozen;
- edible fruit;
- rice;
- wheat flour and semolina;
- pasta, not cooked or stuffed or otherwise prepared;
- bread;
- table salt.
Not all items will benefit from the application of the reduced rate, only those falling under particular commodity codes, specifically defined in the Austrian VAT law.
Impact on businesses
Businesses should first of all check if their goods qualify for the reduced rate. If that is the case then the tax codes of the accounting system should be amended to correctly reflect the reduction in the VAT rate.
If you have any questions or would like further details concerning the reduced rate please get in touch with us.