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No VAT on students’ cake sales

From 2025, Germany’s public sector will also be generally subject to VAT. This will affect, among others, schools and day nurseries. The Finance Ministries in North Rhine-Westphalia and Baden-Wuerttemberg have clarified the conditions under which the cake sales there would not be subject to VAT even in the future. Bavaria likewise issued a decree.

The decree that was issued by the Bavarian State Tax Office on 21.12.2023 (reference: S 7107.2.1-37/20 St33) thus stated that sales by varying groups of students or classes, parent initiatives or student representative bodies would not be subject to VAT also in the future if the payments were not attributed to the legally and economically responsible school authorities, but rather the respective student groups or parent initiatives. This would be the case if these groups presented themselves externally (e.g., on notices, posters and flyers or by means of electronic media) and insofar as they could be regarded as an autonomous enterprising entity. For cake sales at school fêtes, as a rule, no VAT would thus arise because the individual student group or parent initiative would not be active in the long term and, therefore, could not be regarded as a business. This rule will also apply to other occasional sales by students or parents such as, for example, the sale of pizza. Likewise, entrance fees for performances by groups of students in schools, such as theatre study groups or the school choir would, in these cases, not be subject to VAT. Therefore, there will be no changes in current practice at schools.

Please note: Exceptions will apply only if the group organises such events regularly and on an ongoing basis (e.g. weekly). However, even in these cases no VAT would arise if the revenues in the preceding year were less than €22,000 and, in the current year, were not expected to exceed €50,000.

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