Germany will introduce a tax on sugary drinks in 2027

Germany’s governing coalition has reached a compromise on a tax on sugary drinks. The tax is scheduled to take effect on July 1, 2027, and small producers with output below a set threshold are expected to be exempt.

 

Germany has agreed on the main terms of the future tax on sugar in beverages. According to Bild, the tax will primarily affect large producers, while small companies will be able to avoid additional costs. The tax was originally planned to take effect on January 1, 2027. However, following negotiations, the governing coalition decided to postpone its implementation by six months—until July 1, 2027.

Who Will Pay the New Tax

According to Bild, manufacturers that bottle fewer than 70,000 liters of beverages per year will be exempt from the tax. Thus, the new rules are expected to have less of an impact on small businesses. No exceptions are planned for large companies. In particular, according to the publication, manufacturers such as Coca-Cola and Pepsi will be subject to the tax.

Another threshold—one million liters of beverages per year—is to be discussed further at the European Union level. No final details on this issue have been announced yet.

How many tax brackets will remain?

As part of the compromise, the parties also agreed to maintain two tax tiers based on the sugar content of beverages. Representatives of the Christian Democratic Union and the Christian Social Union, which are part of the governing coalition, insisted on this approach. At the same time, the German Ministry of Finance, led by Lars Klingbeil of the Social Democratic Party, had previously proposed introducing a third tax tier. The ministry also wanted to lower the sugar content thresholds used to determine the tax amount and increase tax rates.

According to Bild, these proposals were not included in the compromise agreement. Therefore, the current version provides for two tax brackets, a delayed start date, and an exemption for small producers. However, this is currently an agreement within the governing coalition, not a tax that has already taken effect. Further steps will depend on the drafting and adoption of the relevant decisions. This information was reported by Bild.