Tax break for German nightclubs
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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Techno hedonism is high culture, says Berlin court
As London mourns the death of Fabric and Chicago’s small venues fail to convince local authorities live music is fine art, some good news from Germany: A Brandenburg court has ruled that Berghain, the 1,600-capacity Berlin nightclub widely regarded as the world capital of techno, is a place of cultural significance and thus entitled to a tax break.
In the past Berghain (pictured) would pay tax of 7% on its earnings – the same rate as museums, theatre and concert venues. However, in 2009 German tax authorities decreed clubs should be taxed at 19% as regular ‘entertainment events’, reports Der Spiegel, arguing Berghain is a place where people dance, drink and take drugs – “ruled by entertainment, not by culture” – and could not be classed as a concert venue as it has no stage.
Taking their case to the financial court of Berlin-Brandenburg, club management hit back that the same logic could be applied to a classical concerto. Berghain’s line of argument evidently held water in the eyes of the court, which agreed the club hosts cultural events and should be taxed as such.
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