Tax & Legal

A non-profit association that entitles its sponsor to market the sponsorship measure as part of its advertising while at the same time indicating the association's promotion on its products is a service in return for the sponsorship funds received and as such fully deductible as business expense and not treated as donations. This was decided by the Hamburg Tax Court.

The finance ministry has amended its VAT Implementation Decree to the effect that a charity is deemed to perform a service if it grants a sponsor an explicit right to propagate the sponsorship in his own advertising.

The finance ministry has decreed that sponsorship payments are not consideration for services rendered if the only benefit to the sponsor is the mention of his name.