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Tax break for German nightclubs

Tickets for live DJ performances will now be taxed at the same rate as other concerts following a new ruling by the Federal Fiscal Court

By IQ on 05 Nov 2020

Berlin's legendary Berghain was the first club to benefit from the lower rate of tax

Berlin's legendary Berghain was the first club to benefit from the lower rate of tax


image © Gunnar Klack/Wikimedia Commons (CC BY-SA 4.0)

Live performances by house and techno DJs have been officially recognised as ‘concerts’ by Germany’s Federal Fiscal Court, slashing the tax paid on live electronic music events to 7%.

Tickets for club nights were formerly levied at 19%, but are now eligible for the lower rate of sales tax after being redefined as “concert-like” events by the  Bundesfinanzhof (BFH).

In a judgment dated 23 July, but published in late October, the BFH affirms that “the performance of techno and house music by various DJs give[s] an event the character of a concert, or a concert-like, event even if the music performances take place regularly (weekly),” according to Berlin-based legal firm Härting.

The majority of dance music shows were formerly recognised as ‘party’, rather than cultural, events.

“Most clubs should be able to benefit from the application of the lower tax rate”

The reclassification for clubs throughout Germany follows a similar move specifically for Berlin’s Berghain in 2016, which was recognised as organising culture events and so eligible for the 7% rate of tax.

For nightclubs to benefit from the new tax rules, DJ performances must be the main purpose of the event (as opposed to dancing, partying and drinks sales), according to Härting.

“Even if these requirements have to be checked on a case-by-case basis, most clubs should be able to benefit from the application of the lower tax rate,” the firm says.

All venues and bars in Germany are currently closed under a nationwide lockdown set to run until the end of November.

 


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