Unsere Website verwendet Cookies um bestimmte Funktionen bestmöglich darstellen zu können. Indem Sie fortfahren, stimmen Sie dieser Verwendung zu. Sofern Sie die anonymisierte Aufzeichnung von Daten über die Benutzung dieser Webseite durch Google Analytics nicht wünschen, klicken Sie bitte rechts auf den Button "Opt-Out". Für weitere Informationen lesen Sie bitte die Datenschutzbestimmungen

<p>Ulrich Poser</p>

Leipzig court puts an end to forced revenue tax exemption - RA Ulrich Poser emphasizes the importance of the judgment for the industry

The band Project Pitchfork successfully defended themselves before the Administrative Court in Leipzig against mandatory exemption from revenue tax by the State Administration of Leipzig and the local tax office, which would have led to the elimination of VAT deduction for advertising and operating costs. Lawyer Ulrich Poser, who represented the band in the pro-ceedings, commented on the ruling and its significance for musicians and concert organizers to the magazine “MusikWoche”.

“In practice, it has even been found that tax offices have applied for exemption of tax under Paragraph 4, No. 20 a Line 2 UStG against the will of the musicians and bands”, said Poser. “This has two disastrous con-sequences: firstly, the musicians, who have until then been straightforward entrepreneurs, have to repay input taxes, which can rise considerably in a short space of time for professionals and even lead to insol-vency. Secondly, the exemption in accordance with paragraph 4 No. 20. b UStG can also (retroactively) affect concert organizers, who may then face the same consequences.”

The Leipzig ruling, which now puts an end to this practice in the case of Project Pitchfork is characterized as “very important” for the industry by Poser: “On the one hand, because - as far as I am aware – there has until now not been a successful ruling on this issue and on the other hand because the Administrative Court in Leipzig has justified in a very detailed and well-founded manner, why it is unlawful if the responsible authority eliminates the VAT deduction against the will of a band or musical group that has been very successful commercially on the market for over 20 years, potentially exposing them to above mentioned fatal consequences.”

The ruling contains the central message that “a commercial music ensemble does not fulfil the ‘same cul-tural functions’ as a subsidized theatre, an orchestra or a chamber music ensemble”, which are all per se ex-empt from VAT. The court ruled that “the considera-tion between the intention of making profit and the cultural aspect in this case went in favour of my client”, says Ulrich Poser.

“People who have been commercially successful for decades, have been headlining at major open air events, have achieved chart success and been nominated for the Echo, are quite simply not comparable to a subsidized national orchestra”, said Poser. The ver-dict is not yet final. The Hamburg-based media lawyer assumes “that the second instance, if it actually goes that far, will come to the same decision”.

In 2009, a ruling by the Administrative Court in Munich had de facto granted the tax authorities the ability to declare concerts of all kinds for sales tax exempt. At the time, the court ruled that not only artists but also the organizers were to be exempted from sales tax if they meet the same cultural functions as public institutions. The National Association of Event Management (bdv) predicted at the time that the application of this regulation would lead to significantly increasing cost burdens through the associated lapse of VAT deductions for the concert industry and inevitably mean more expensive concert tickets.
Source: MusikWoche