A leading hotel and restaurant association in North Rhine-Westphalia, Dehoga NRW, has expressed concerns over the potential negative impact of the German government’s plan to make digital payments mandatory on the hospitality industry’s staff. The association’s president, Patrick Rothkopf, highlighted the additional costs of transferring money digitally, as well as a more significant issue: the potential for tax complications.
Rothkopf pointed out in an interview that in Germany, tips are generally tax-free, but this could change when the service provider is involved in the payment process, whether digitally or in cash. He explained that the moment the restaurant is involved in the payment, problems can arise, as the tax authorities might view the digital tip as a taxable income.
To circumvent this, some businesses have resorted to using a separate card reader, allowing customers to pay the tip after the main transaction. However, Rothkopf believes this is not a sustainable solution.
While technically, the association’s president acknowledged that it would be possible to book the digital tip as a separate item, he emphasized that this is a fundamental problem. He called for simpler, clearer and easier-to-implement legal regulations that would simplify the daily operations of businesses, rather than complicating and unsettling them. According to Rothkopf, this requires a change in the political attitude towards entrepreneurs and citizens, shifting away from over-regulation and towards more trust.