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Germany: Prize money from television show not subject to VAT

Germany: Prize from television show not subject to VAT

The German Federal Tax Court (BFH) concluded that prize money from a television show is not subject to value added tax (VAT).

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In the case before the BFH, an individual (an advertiser) participated in a television show in which the winner of the show—out of a total of 12 participants who moved into a house—won a prize as well as a weekly lump-sum for expenses and a flat-rate reimbursement for damages and wear and tear to clothes. The individual won the show and received the prize, in addition to a weekly lump-sum payment for seven weeks.

The tax authorities asserted that through his participation in the film production and the related granting of rights, the individual had rendered a taxable supply subject to VAT. A lower tax court upheld the claim of the individual and was confirmed by the BFH.

Other VAT developments

Other recent VAT developments that may affect businesses in Germany include the following items:

  • Changes to the regulations for distance sales from 2021 (ECOFIN Council, decision of 12 March 2019)
  • Input tax deduction in the case of investment fraud using non-existent thermal power stations (BFH, ruling of 5 December 2018)
  • Reclaiming VAT despite agreement on gross prices (Federal Supreme Court, decision of 20 February 2019)
  • Liability for VAT when trading goods on the internet (German Ministry of Finance, guidance of 21 February 2019)

 

Read a March 2019 report [PDF 320 KB] prepared by the KPMG member firm in Germany

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