10 December 2019
A self-help organization recognized as a non-profit organization held scientific congresses and rented booth space to pharmaceutical companies, which advertised their products there. The tax office taxed the stand rentals as profit from a commercial business operation.
The Federal Fiscal Court ruled that although the rental of stand space is not a tax-exempt special-purpose operation, the advertising income is nevertheless tax-privileged and only 15% is taxable as profit from an economic business operation. The court clarified that advertising income in connection with the tax-privileged activity is not only tax-privileged from active advertising, e.g. jersey advertising, but also from passive advertising, as in the case decided.
Note: If the income, including sales tax, from commercial operations that are not special-purpose operations does not exceed the amount of €35,000 per year, there is no taxation of income.
BFH, Urt. v. 26.06.2019, V R 70/17, BFH/NV 2019, p. 1146 § 64 para. 6 no. 1 AO § 64 para. 3 AO