Since 1 July 2026, Austria has applied a new reduced VAT rate to selected basic food products. For qualifying goods, the previous 10% VAT rate has been reduced to 4.9%.
Which products are covered?
The new 4.9% VAT rate does not apply to all food products. It applies only to specific categories defined by Austrian law, including:
- milk, including lactose-free milk
- yoghurt and butter
- fresh chicken eggs
- bread
- rice
- wheat flour and semolina
- certain types of pasta
- table salt
- various fresh, chilled and frozen vegetables
- certain types of fruit
The exact classification of qualifying products is determined by Annex 3 to the Austrian VAT Act (UStG) and the relevant Combined Nomenclature classifications.
What does this mean for businesses?
Businesses selling or importing qualifying food products have been required to apply the new 4.9% VAT rate since 1 July 2026.
It is particularly important to correctly classify individual products and to update cash register, inventory and accounting systems accordingly.
The reduced VAT rate generally applies to the supply and import of qualifying food products. Restaurant and catering services are not automatically covered by the new 4.9% rate.
Businesses operating in food retail, bakeries and other food-related sectors should therefore review their product classifications and VAT settings to ensure that the correct tax rate is being applied.
