Shopping Relief: VAT on Groceries to Drop Starting July 2026

Good news for all households in Austria: Daily grocery shopping is set to become noticeably cheaper. After high food prices have been a major topic in recent years, the federal government has now reacted.

Current Update from January 28, 2026: Today, the decisive decision was made in the Council of Ministers. To cushion inflation and make healthy food more affordable, the Value Added Tax (VAT) on essential basic foodstuffs will be virtually halved. Instead of the previous 10%, only 4.9% will apply from July 1, 2026.

I have summarized here exactly what this means for your shopping cart and which products are affected.

These Products Will Become Cheaper

The reduction mainly affects fresh and healthy products that almost everyone needs daily. The focus is clearly on staple foods – from milk for coffee to vegetables for lunch.

Here is an overview of the categories where you will pay less tax starting this summer:

🥛Milk, Dairy & Eggs

Especially for families, this is a large item in the household budget. The reduction applies to:

• Milk (including lactose-free animal milk)

• Butter & Yogurt

• Eggs (from hens)

🥕 Vegetables (Fresh & Frozen)

The list is particularly long here. Whether for a salad or a stew, the following varieties are included:

• Classics: Potatoes, tomatoes, cucumbers, carrots, turnips, and celeriac.

• Aromatic: Onions, garlic, leek, and other Allium vegetables (excluding sets/planting onions).

• Cabbage types: Cabbage, cauliflower, kohlrabi, etc.

• Legumes: Beans, peas.

• Salads & Others: Various leaf salads, pumpkin/squash, aubergines (eggplant), peppers, and asparagus.

• Freezer Aisle: Frozen vegetables (e.g., peas, spinach) without further additives also fall under the 4.9%.

🍎Fruit

The fruit basket also gets taxed less:

• Pome fruit: Apples, pears, and quinces (fresh).

• Stone fruit: Apricots, cherries, peaches, and plums (fresh).

🍞Grains & Baked Goods

Daily bread is essential. The reduction applies broadly here:

• Bread & Pastries: Bread rolls (Semmeln), breadsticks, etc.

• Important for allergy sufferers: Gluten-free bread is also included.

• Basics: Rice, wheat flour, wheat semolina, and pasta (without filling).

Additionally, table salt is also covered by the new regulation.

Summary & Conclusion

Starting July 1, 2026, it will be especially worth looking at the sales receipt. Due to today's Council of Ministers' decision, the tax burden on the most important foodstuffs will drop from 10% to 4.9%.

The essentials in brief:

1. Start Date: July 1, 2026.

2. Savings: VAT is more than halved.

3. Focus: Healthy staple foods (fruit, vegetables, dairy products, bread) are relieved.

Now we remain hopeful that retailers will pass this tax cut on to us consumers 1:1, so that at the end of the month there really is more left in our wallets.