Austria’s Nationalrat has approved a draft bill introducing a 4.9% VAT rate on selected staple foods under the Value Added Tax Reform Act 2026, with implementation subject to Bundesrat approval and planned entry into force from 1 July 2026.
The Austrian Parliament (Nationalrat) approved on 21 May 2026 a draft bill introducing a reduced Value Added Tax (VAT) rate on staple foods. The measure forms part of the Austrian Value Added Tax Reform Act 2026 and still requires approval by the Federal Council (Bundesrat) before enactment.
The reform introduces a new 4.9% VAT rate under § 10 Abs. 1a of the Value Added Tax Act 1994 (UStG 1994), applicable to the delivery and import of specific goods listed in the new Annex 3 (Anlage 3). These include selected essential food items such as milk (including lactose-free varieties), yoghurt, butter, fresh chicken eggs, rice, wheat flour, wheat semolina, bread, simple pasta (not cooked, filled, or otherwise prepared), table salt, and defined categories of fresh, chilled, or frozen vegetables and specific fruits.
The legislation establishes a hierarchy of VAT rates, with the 4.9% rate applied first where conditions are met. If not applicable, a 10% rate is applied, followed by a 13% rate where neither reduced rate applies.
The changes are scheduled to enter into force on 1 July 2026 and will apply to all transactions and tax-relevant events executed or occurring after 30 June 2026.
