Skip next section German lawmakers consider slashing restaurant taxes
12/04/2025December 4, 2025
German lawmakers consider slashing restaurant taxes
The German parliament is discussing a plan to permanently lower sales tax on restaurant food to the same level that it was at during the coronavirus pandemic.
The move is part of a broader effort to support businesses and consumers facing inflation, high energy costs and weaker purchasing power.
Ministers have already approved draft legislation from Finance Minister Lars Klingbeil that would reduce the tax on food served in restaurants from 19% to 7%.
The measure still requires parliamentary approval. It forms part of the policy package negotiated in the coalition deal between Chancellor Friedrich Merz’s conservative bloc and Klingbeil’s center-left Social Democrats.
The coalition, which took office in early May, has made reviving Germany’s slowing economy a central priority.
During the coronavirus pandemic, sales tax on restaurant food had been temporarily cut to 7% to help the sector through lockdowns, but after the end of restrictions the rate returned to 19%.
Can massive state spending turn the German economy around?
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Skip next section Study finds German store closures have accelerated
12/04/2025December 4, 2025
Study finds German store closures have accelerated
Germany has been seeing a faster wave of retail insolvencies, with a new study reporting 2,490 bankruptcies between August 2024 and August 2025.
The analysis by credit insurer Allianz Trade said the figure came close to the previous record of 2,520 cases set between 2015 and 2016.
“The retail sector is still struggling with the profound changes to its business model that began during the pandemic,” said Allianz industry expert Guillaume Dejean. “To withstand the intensified competition from major online marketplaces, retailers have to invest heavily in digital channels, data-driven merchandising and innovative technologies for store design.”
Allianz Trade said many chains are introducing autonomous warehouse systems, AI-based product recommendation tools and robotic shelf-scanners. Others are testing self-navigating service robots on the shop floor to help customers find items. The insurer said small shops are under particular pressure, describing the situation as “a David-versus-Goliath battle”.
The study said these innovations improve customer experience and profitability but require large upfront spending that many smaller operators cannot afford.
However, the insurance firm also pointed to positive signals, including rising real wages and improved credit conditions.
EU finance ministers have agreed to introduce tariffs on low-cost parcels from Chinese platforms such as Shein, Temu and AliExpress “as soon as possible in 2026”, which could ease competitive pressure.
German insolvencies rise amid runaway costs and inflation
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Skip next section Welcome to our coverage12/04/2025December 4, 2025
Welcome to our coverage
There’s a festive glow at the heart of the city of BonnImage: Ying Tang/NurPhoto/picture alliance
Guten Tag from DW’s newsroom in an already very Christmassy Bonn.
Danke schön for joining us as a new study reports almost record retail insolvencies in Germany between August 2024 and August 2025.
Insurer Allianz says retailers are under pressure to invest in costly digital tools, AI systems and automated logistics to compete with major online platforms, leaving small shops in a “David-versus-Goliath” fight.
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