- The momentous decision reduces the VAT rate on entrance fees from 19 to seven percent.
The highest financial court in Germany has ruled that dance music parties merit the same tax breaks as concerts.
The momentous decision means that clubs across Germany can now pay seven percent VAT on entrance fees instead of 19, which has been the standard rate since 2009. The case reached the federal fiscal court, known locally as Bundesfinanzhof, after Berlin club Berghain and an event in Saxony won cases in their local courts, Süddeutsche Zeitung reports.
The ruling hinged on whether events at clubs can be considered concerts, which are "culture," or parties, which are "entertainment." The Bundesfinanzhof chose the former, so long as "the musical performances represent the actual purpose of the event from the perspective of an 'average visitor.'" This suggests that only clubs with curated programmes are eligible for the reduced rate.
"You still have to prove that people are coming because of the DJs and the artists," Lutz Leichsenring from Clubcommission Berlin told Resident Advisor. "So a shopping mall with a live DJ is probably unlikely to get the seven percent rate because people go there to shop. You have to have a strong argument."
He added: "This is the highest decision you can get on this matter. There's no next level of court. The tax office has definitely lost."
This story stretches back to 2005, when the Bundesfinanzhof first ruled that techno events were equal to concerts. This decision was reversed in 2009, which led to Berghain suing the city of Berlin, and winning, in 2016.