The history of the coffee tax in Germany begins at the time of Old Fritz. Frederick the Great introduced the state coffee monopoly in 1781. At that time, coffee consumption rose sharply and the state used this as a source of revenue. Coffee was subject to import duty and this remained the common form of tax for a long time. The tax continued to undergo changes in various historical periods. The coffee tax is an important source of income for the German tax authorities: it raises around one billion euros for the public purse every year. However, anyone who buys coffee for their own consumption from retailers does not have to worry about becoming a tax evader. Even those who order coffee for their own consumption on the Internet are on the safe side in terms of tax. This is because growers, processors, sellers and mail order companies are responsible for paying the tax to the tax office on deliveries to private end consumers. Germany is one of the few European countries in which a coffee tax applies. Even in the present day, this still leads to some tendencies that make people smile. If you look at the sheer quantities, for example, people in the Grand Duchy of Luxembourg drink the most of the hot, black beverage of all Europeans: 25.6 kilograms of green coffee per year. This is hard to believe, given that the Germans are also big coffee lovers, not to mention the Finns. The explanation for Luxembourg being the European coffee champion leads to a phrase attributed to former British Prime Minister Winston Churchill: Only believe statistics that you have falsified yourself. As there is no tax on coffee in Luxembourg , its German neighbors like to buy it there because it is cheaper in the Grand Duchy. Even within the Federal Republic of Germany, there are oases where the coffee tax is not levied. On the North Sea island of Heligoland and in the municipality of Büsingen. The latter is completely surrounded by the territory of Switzerland, but belongs to the district of Constance in Baden-Württemberg. This special status makes the municipality a coffee tax-free zone.
Which countries have coffee tax?
- Germany
- Austria
- Switzerland
- France
- Italy
- Spain
- Netherlands
- Denmark
- Great Britain
- Sweden
- Norway
- Finland
Taxable object in coffee tax law
The Coffee Tax Act defines coffee as roasted coffee and soluble coffee.
Roasted coffee
Roasted coffee is roasted coffee that can also be decaffeinated. (Section 1 (3) KaffeeStG).
Soluble coffee
Soluble coffee are extracts, essences and concentrates of coffee, which may also be decaffeinated (Section 1 (4) KaffeeStG). The quantity of coffee for soluble coffee in the form of liquid extracts, essences and concentrates is determined by the dry mass (§ 2 Para. 1 KaffeeStV); if it cannot be determined whether the goods are roasted coffee or soluble coffee, they must be classified as soluble coffee in case of doubt (§ 2 Para. 1 KaffeeStV). The raw coffee beans (green coffee) are not subject to coffee tax.
Goods containing coffee
Goods containing coffee are products that contain between 10 and 900 grams of coffee per kilogram. Goods with a lower coffee content are not covered by coffee tax law. Goods with a higher coffee content are taxed as coffee. Goods containing coffee are, for example, cappuccino, iced coffee, café au lait or goods containing coffee from the confectionery sector (Section 1 (5) KaffeeStG).
While roasted and soluble coffee are always taxable items in the German tax territory, this only applies to goods containing coffee if they are transported from other EU Member States or imported from third countries or third territories (Section 1 (1) KaffeeStG). This serves to ensure equal treatment with goods containing coffee produced in the German tax territory. These are produced from coffee that has already been taxed or the coffee used – if produced by the tax warehouse owner – is taxed by being released for free circulation.
How is coffee tax calculated in Germany?
The coffee tax in Germany is currently EUR 2.19 per kilogram (EUR/kg) for roasted coffee and EUR 4.78/kg for soluble coffee. In the case of blends of both forms, the tax rate is based on the respective proportion.
