The Austrian Parliament is considering a draft amendment to the Value Added Tax Act 1994 to reduce VAT on selected basic foodstuffs, following approval by the Finance Committee on 12 May 2026, with the measure expected to apply from 1 July 2026.
The Austrian Parliament is reviewing a draft bill amending the Value Added Tax Act 1994 (Umsatzsteuergesetz 1994) to introduce a reduced VAT rate of 4.9% on selected basic foodstuffs. The measure was approved by the Finance Committee on 12 May 2026 and has been submitted to the National Council for constitutional approval.
The proposed amendment reduces the VAT rate from 10% to 4.9% for a defined basket of goods, including milk (including lactose free), yogurt, butter, fresh chicken eggs, fresh or chilled vegetables (with some exclusions), frozen vegetables, edible fruits, rice, wheat flour and semolina, uncooked or unfilled pasta, bread, and table salt. Restaurant sales are explicitly excluded from the reduced rate.
According to the legislative report, the Finance Committee reviewed the government draft during a May 2026 session and consulted the head of the Budget Service, Mag. Kristina Fuchs, MPA, who was appointed as an expert consultant for the proceedings. The deliberations included participation from the Federal Minister of Finance, Dr. Markus Marterbauer, Committee Chairman Andreas Ottenschläger, Rapporteur Dr. Christoph Matznetter, and other members of parliament.
The bill was approved by a majority vote in the Finance Committee, with supporting votes from the V, S and N parties, while the F and G parties voted against it.
If adopted, the reduced VAT rate is scheduled to apply from 1 July 2026.
