Factsheet for measure
AT-2026-27/4331
– measures in Austria
VAT reduction on basic foods
Mehrwertsteuersenkung auf Grundnahrungsmittel
Background information
In mid-2025, the EU launched an excessive deficit procedure against Austria due to excessive new debt. Thus, the country has been put under a saving regime; the energy crisis in 2026 increased inflation again so that many people felt life would increasingly become more expensive.
Amid a strict budgetary savings plan, however, the government implemented a reduction of value added tax (VAT) in order to support its citizens.
Content of measure
In July 2026, a reduction in value added tax (VAT) from the current 10% to a permanent 4.9% for selected basic foodstuffs is implemented.This tax cut is part of a relief package by the federal government to reduce the costs of daily grocery shopping. Affected products include, among other things, milk, yogurt, butter, fresh eggs, fresh/frozen vegetables, pome and stone fruits, rice, wheat flour, pasta, bread and table salt. Not included are e.g. meat, sausages or processed foods (such as coffee) as well as consumption in restaurants.
It is expected that private households will save an average of around €100 per year at total costs of €400 million annually for the government.
Use of measure
The VAT reduction affects all persons buying basic food groceries in Austria.
Target groups
|
Workers
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Businesses
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Citizens
|
|
Does not apply to workers
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Applies to all businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
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No special funding required
|
Social partners
Social partners' role in
designing the measure
and form of involvement:
|
Trade unions
|
Employers' organisations
|
|
Role
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No involvement as case not in social partner domain
|
No involvement as case not in social partner domain
|
|
Form
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Not applicable
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Not applicable
|
Social partners' role in the
implementation, monitoring and assessment phase:
-
No involvement
-
Main level of involvement: N/A
Involvement
No involvement of the social partners.
Views and reactions
The Chamber of Labour AK and Austrian Trade Union Federation welcome the VAT reduction. The Federal Economic Chamber criticises that for companies, this entails considerable effort in cash register systems and merchandise management, as the prices must be displayed exactly according to the new specification.
Sources
