Budget Day Special 2025
VAT and excise duties
Retaining reduced VAT rate for culture, media and sport
The previously adopted plan to raise the VAT rate for culture, media and sport to 21% has been reversed. The reduced rate of 9% remains applicable for these transactions. To finance retention of the reduced rate, the annual inflation correction for income and payroll taxes will only partially be applied in 2026. As a result, disposable income increases less, but prices for culture, media and sport remain lower.
Take note!
The low VAT rate for accommodation is being abolished and increases from 9% to 21%.
Amendment to consumption tax definition of dairy-content
The dairy-content exception as defined under consumption tax on non-alcoholic beverages is being tightened. Beverages containing a whiff of dairy-content or added flavouring will now be subject to consumption tax. Milk, buttermilk and soya beverages with a content of up to 5% sugar and 1.1% saturated fats remain excluded. The term ‘lemonade’ is also being replaced with ‘other non-alcoholic beverages’ for greater clarity.
Take note!
Beverages such as chocolate milk and fruit drinks with dairy-content will be taxed in future.
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