Persistent inflation and stalled growth pushes government to cut food VAT rate from 12% to 6%
On 25 February 2026, the Swedish Parliament voted in favour of an announced temporary reduction in the food VAT rate from 12% to 6%.
This applies from 1 April 2026 until 31 December 2027.
Global trade worries driving inflation for households
VAT on food and drinks in stores are now reduced from 12% to 6%. Food taken from a restaurant (takeaway) is subject to 6% VAT, just like in stores, while food eaten on site will still have 12% VAT.
Austria and Denmark are also reviewing 2026 food VAT cuts.
Despite recent interest rate cuts, the economy has yet to recover from the post-pandemic surge in prices and uncertainty caused by global trade tensions.
To ensure retailers pass these savings on, the government will set up a “food commission” to monitor prices, with a particular focus on Sweden’s heavily concentrated supermarket sector. Authorities have already expressed concerns about weak competition, and Finance Minister Elisabeth Svantesson summoned grocery executives earlier this year over rising prices.
The VAT cut forms part of a wider economic package. The government has pledged an increase in housing allowances for low-income families costing 655 million crowns, and analysts expect further income and corporate tax relief. At the same time, Sweden faces rising spending obligations, from meeting NATO defense commitments to accelerating its transition away from fossil fuels.
Read more in our Swedish country guide.
