When we offer a combination of products for a single price, and those products have varying VAT rates, we have to calculate the VAT on each product separately. We can’t sneak 19% products into a Menü at 7%, that’s tax evasion. We can distribute the total price among the individual items as we like, but we have to assign a minimum price of at least the “production cost” to each item. In a Menü the food is usually 7% and the drink is 19%, so we tax the drink (at least) at the minimum price and the food at full price.

When we add a free non-food item to the combination, the price paid stays the same, but the additional item has a “production cost”. That increases the amount we have to tax at the higher rate, so the total VAT for the Menü increases when we add a free glass.

Clear as mud? I had to take a half-day course on VAT calculation to be able to program the prices in our cash registers!

BTW The FDP and CSU platforms included a VAT decrease for both hotels and restaurants. We’re disappointed they left restaurants out and are demanding a refund on our donation.

You do have me curious, though.