Upcoming VAT Increase: Germany (Effective 1 January 2026)

On January 1, 2026, Germany will reduce the VAT rate for food products from 19% to 7%. This change applies to all accommodation providers in Germany that sell food and beverage products, including packaged items such as breakfast packages.

For packaged products that contain both Food (7% VAT from 2026) and Drinks (19% VAT), you must prepare separate items in advance. You must ensure that the sum of the gross prices of your individual products equals the gross price of your original package.

For example:

• Breakfast package price: €18

• Breakfast Food: €11.50

• Breakfast Drinks: €6.50 

• Total: €18

Use the scheduling of add-ons feature to prepare for January change.

1. What should I do if I receive a reservation today for 2026? 

Reservations made for 2026 will be recorded in your PMS using your current rate and VAT percentage. To prepare in advance, we recommend updating your rates via the Channel Manager or adjusting the prices of your add-ons (e.g. breakfast) for 2026. This proactive approach helps ensure you do not bear the full impact of the VAT increase. 

2. What should I do if a guest books for 2026 and requests their invoice now? 

It is not possible to issue an invoice reflecting the VAT change for a 2026 stay before 1 January 2026. In such cases, you will need to generate a RoomRaccoon Proforma invoice. 

3. How should I handle reservations that start in 2025 and end in 2026? 

Use the Mid-Stay Move feature to split the reservation into two parts — one for 2025 and one for 2026. This ensures that the applicable VAT rate is correctly applied to each portion of the stay. Please ensure that all 2025 stays are invoiced before 1st of January 2026.

4. What should I do on 31 December 2025 to prepare for the VAT change? 

Verify that all stays with check-out dates in 2025 have been invoiced at the old VAT rate before the end of the year. This will ensure accurate reporting and a smooth transition to the new VAT rate. 

5. What should I do on 1 January 2026? 

Do not wait until 1 January 2026; prepare now and use the scheduling of add-ons feature to prepare for this change ahead of time. 

6. What are my options for managing the VAT increase? 

 You have several options to manage the upcoming VAT adjustment: 

• Pass the reduction on to guests: Adjust your food prices in the Channel Manager to reflect the lower VAT rate. For example, reduce breakfast or menu prices so guests benefit from the 12% VAT decrease.

• Partially absorb the reduction: You may choose to lower prices only partially, keeping some of the VAT savings to improve your margin.

• Distribute the impact strategically: Consider modest price adjustments on high-volume items (e.g., breakfast packages) to optimize both guest satisfaction and revenue.

• Automate your price adjustments: Use the Scheduled Add-On Prices feature to implement the VAT change automatically, ensuring accuracy across all channels.