Table of Content
1. Customs classification of coffee and tea
The reason for these differences lies in the European customs tariff, the so-called Combined Nomenclature (CN). For other foods, several CN chapters can come into play depending on the base ingredient. For coffee and tea, however, two are enough, because both are a single, clearly defined raw material. Accordingly, the only thing that matters is whether the product is raw or lightly processed, or already extracted.
The following tariff positions are relevant here:
- Chapter 9: coffee, tea, maté and spices in raw or lightly processed form, for example as whole beans or loose leaves.
- Heading 2101: extracts, essences and concentrates of coffee, tea or maté, for example instant coffee or tea extract, as well as roasted coffee substitutes such as chicory (a roasted root used as a caffeine-free coffee substitute).
A roasted coffee bean therefore falls under Chapter 9, while instant coffee falls under heading 2101, even though both come from the same raw material. Chapter 9 and heading 2101 only determine how a product is classified for customs purposes, not whether it is reduced-rated. That is decided solely by each country’s national VAT law, and that is exactly where the differences between EU countries begin, as the overview in the next section shows.
2. VAT treatment of coffee and tea in the EU
Across all 27 EU member states and the United Kingdom, three broad tendencies can be identified. Some countries reduce the rate on coffee and tea based on the customs tariff, fully or largely. Others apply a general reduced rate for food, without checking the customs tariff in detail. Others again grant no reduction at all. Within these tendencies, however, there are significant differences in detail, as the following comparison shows.
Looking more closely, our analysis groups member states into four categories, depending on what they tie the reduced rate to.
| Group | Principle | Countries |
|---|---|---|
| 1. Pure customs-tariff orientation | The country ties the reduced rate directly to specific, self-defined CN positions. Only what is explicitly listed there is reduced-rated; everything else stays at the standard rate. | Germany, Greece, Austria*, Poland* |
| 2. General food discount, no CN-code link | "Food for human consumption" is reduced-rated without any CN code being checked. | Netherlands, Luxembourg, Spain, Finland, France, Cyprus, Sweden, United Kingdom |
| 2b. General food discount, with CN exceptions | Reduced-rated in principle, but certain CN codes are explicitly excluded. | Czechia, Romania, Slovenia, Slovakia, Malta |
| 3. Dedicated, named reduction | Coffee, tea and related products are reduced-rated as their own, explicitly named position. | Belgium |
| 4. No reduction | Coffee and tea are taxed at the full rate. | Bulgaria, Denmark, Estonia, Croatia, Hungary, Lithuania, Latvia, Portugal |
Group 1 stands out in particular: Germany and Greece reduce coffee and tea there in full. Austria and Poland (both marked with *) exclude coffee, tea and maté under Chapter 9 entirely from the reduced rate and only reduce a narrow slice of Chapter 21 (roasted chicory and other coffee substitutes, including their extracts). How big this difference can be is shown by the comparison between Germany and Austria further below.
Two further countries can’t be cleanly assigned to any group. Italy reduces tea but excludes coffee from the reduction within the same chapter. Ireland distinguishes based on whether coffee or tea is already ready-to-drink or not: non-drinkable goods are reduced-rated, drinkable ones are not. Depending on the form in which it’s sold, one and the same product can therefore trigger two different tax rates.
3. VAT rates for coffee and tea by EU country
Here is how these patterns translate into actual figures (as of September 2026):
| Country | Standard rate | Reduced rate | Group |
|---|---|---|---|
| Austria* | 20% | 10% | Group 1 |
| Belgium | 21% | 6% | Group 3 |
| Bulgaria | 20% | – | Group 4 |
| Croatia | 25% | – | Group 4 |
| Cyprus | 19% | 5% | Group 2 |
| Czechia | 21% | 12% | Group 2b |
| Denmark | 25% | – | Group 4 |
| Estonia | 24% | – | Group 4 |
| Finland | 25.5% | 13.5% | Group 2 |
| France | 20% | 5.5% | Group 2 |
| Germany | 19% | 7% | Group 1 |
| Greece | 24% | 13% | Group 1 |
| Hungary | 27% | – | Group 4 |
| Ireland | 23% | 0% | Special case |
| Italy | 22% | 10% | Special case |
| Latvia | 21% | – | Group 4 |
| Lithuania | 21% | – | Group 4 |
| Luxembourg | 17% | 3% | Group 2 |
| Malta | 18% | 0% | Group 2b |
| Netherlands | 21% | 9% | Group 2 |
| Poland* | 23% | 8% | Group 1 |
| Portugal | 23% | – | Group 4 |
| Romania | 21% | 11% | Group 2b |
| Slovakia | 23% | 19% | Group 2b |
| Slovenia | 22% | 9.5% | Group 2b |
| Spain | 21% | 10% | Group 2 |
| Sweden | 25% | 6%** / 12% | Group 2 |
| United Kingdom (non-EU, reference) | 20% | 0% | Not an EU member |
*Austria and Poland exclude coffee, tea and maté under Chapter 9 entirely from the reduced rate and only reduce a narrow slice of Chapter 21 (roasted chicory and other coffee substitutes, including their extracts); **Sweden: 6% applies until 31 Dec 2027, after which the rate rises to 12%.
How this system works in practice can be seen by looking at two neighbouring member states: Germany and Austria.
4. VAT on coffee and tea in Germany
Germany reduces the rate on coffee and tea in full, in line with the Combined Nomenclature (CN). Chapter 9, raw or lightly processed coffee, tea and maté, is fully reduced-rated. Heading 2101 within Chapter 21 is also fully covered, including extracts, essences and concentrates of coffee, tea or maté, as well as roasted coffee substitutes such as chicory. Whether a product is sold as a raw good, an extract or a substitute product therefore makes no difference to the tax rate in Germany.
5. VAT on coffee and tea in Austria
Austria is also guided by the Combined Nomenclature, but interprets it far more strictly. Genuine coffee, tea and maté under Chapter 9 are not reduced-rated, whether as a raw good or as an extract. Only subheading 2101 30 is reduced-rated: roasted chicory and other roasted coffee substitutes, along with their extracts, essences and concentrates. Coffee and tea substitute products therefore benefit from the reduced rate in Austria, while genuine coffee and tea do not.
For retailers, this is more than a footnote. A product that’s fully covered by the reduced-rate Chapter 21 in Germany can be taxed at the full rate in Austria, as soon as it falls outside the covered subheadings. The same specialty product can therefore be taxed differently depending on the country it’s sold in. This example isn’t an isolated case, it’s typical of a fundamental problem: knowing the rate alone isn’t enough if the classification behind it is wrong.
6. Germany vs. Austria: where the differences lie
| Area | Germany | Austria |
|---|---|---|
| Chapter 9 (coffee, tea, maté) | Reduced (7%) | Not reduced (20%) |
| Heading 2101 (extracts, concentrates of coffee/tea/maté) | Reduced (7%) | Not reduced (20%) |
| Subheading 2101 30 (coffee/tea substitutes, e.g. chicory) | Reduced (7%) | Reduced (10%) |
For retailers, this means in practice: the same raw coffee or loose tea costs 7% VAT in Germany and the full rate of 20% in Austria. Only substitute products such as roasted chicory are reduced-rated in both countries, albeit at different levels. The same underlying principle, applied to two direct neighbours, produces one of the biggest differences in this entire overview.
7. Classifying coffee and tea correctly for tax purposes
As the examples of Germany, Austria, Italy and Ireland show, it isn’t the product itself that determines the tax rate, but its exact classification. The path to the correct rate always follows the same order: a product’s composition and degree of processing first determine the applicable CN code, regardless of how the product is marketed. The CN code and the destination country then determine which national VAT rule applies. And only from that rule does the actual tax rate follow.
Just how narrow these lines can be is shown by the examples above: whether a product counts as a raw good, an extract or a substitute can decide a reduction of several percentage points, even within a single country.
A wrong classification rarely stays without consequences. If it later turns out that a product should have been taxed at the full rate instead of the reduced one, the tax authority will claim the difference retroactively for the entire period concerned. That shortfall usually can’t be passed on to customers who have already been invoiced, so it comes straight out of the seller’s own margin. On top of that, a wrong classification can also carry legal consequences. Anyone trading internationally in coffee and tea carries this risk anew with every product and every destination country.
8. Summary & VAT Classification
Coffee and tea show that one and the same principle can lead to very different tax rates in two countries, as the comparison between Germany and Austria demonstrates. Across the remaining 25 member states and the United Kingdom as a non-EU reference, this pattern repeats itself in further variations, from a dedicated, named reduction all the way to no reduction at all, or, as in Ireland, even within a single country: the same coffee is taxed differently there depending on whether it’s ready-to-drink or not.
Across 27 EU member states, four distinct groups and several special cases such as Italy or Ireland, this is barely something you can classify correctly from memory, let alone across an entire product range and over time, as recipes or national rates change. eClear VAT Classification takes over exactly this step: the tool automatically assigns every product to the correct customs position based on its actual composition, and matches it against the currently applicable reduced-rate rule in each destination country, individually for every country and without manual review.
As of September 2026. This article is for general information purposes only and does not replace individual legal or tax advice.
