[Help needed] Prove we are ARTsy to Finanzamt
The purpose of our Verein is the promotion of art and culture. The Kiez Burn event is one of the primary ways we pursue this. If we can prove this, we only have to pay 7% taxes, not 19% taxes. The fewer taxes we need to pay, the more we can spend on art & culture.
We would like to ask for your help. Who would feel inspired to make a digital & short-ish summary of 2019 that can be printed & shown to the "Finanzamt" of how we have promoted art & culture?
2019 dreams platform: dreams.2019.kiezburn.org
2019 program/booklet: https://drive.google.com/file/d/1ml2ZYI4qkeYrRWYXZdw-I6RoqazfiH0R/view?usp=sharing
Ideally we have this overview/summary in German, but English would also help (we could see to translate it later).
For 2020, we would again like to have an easy overview of the different cultural and artistic events taking place (such as the program/booklet). This does not need to be printed, but it is important that it is made, so we have a case to make.
Ideally, we make our culture & art case as we move forward.
Benjamin Langholz Sat 29 Feb 2020 7:29PM
Another reason to invest energy and funds to make sure there is ART at KiezBurn 2020 😊😉
Jeff Spirlock Mon 9 Mar 2020 10:01AM
What is culture?
the arts and other manifestations of human intellectual achievement regarded collectively.
the ideas, customs, and social behaviour of a particular people or society.
As this event was born from Burning Man Culture, it is relevant where Kiez Burn draws it’s inspiration. What qualifies as art is subjective. When addressing what main stream society views as art we must realize that not all art is viewed as art by society outside this event. To not attempt at educating our Tax Advisor on our culture is not in our best interest. If our Tax Advisor doesn’t understand the event he represents then how can we expect the Finanzamt to ever fully grasp this events cultural significance.
I believe I have a good grasp on what the Finanzamt would like to see as documentation. It makes me sad to say I just don’t see such documentation existing at this point in time. Do we give up and admit defeat? Of course not. It is on us as a community to educate those impacted by our event and our communities actions. That includes our Tax Advisor and the Finanzamt.
The future documentation of funds allocated for infrastructure, Dreams and Kieze need to follow a format that will be deemed appropriate by the Finanzamt. Photographic evidence of these things could also be beneficial. Actual pictures of the artistic and cultural contributions at the event that Kiez Burn funds make possible should be recorded. It may not be deemed relevant but it rarely hurts to have additional documentation.
Kiez Burn’s Principles were crafted not as a way to dictate how people should be and act, but as a reflection of the community’s ethos and culture as it had organically developed since the event’s inception. Here are a few of those principles pertaining to our cultural and artistic significance.
In order to preserve the spirit of gifting, our community seeks to create social environments that are unmediated by commercial sponsorships, transactions, or advertising. We stand ready to protect our culture from such exploitation. We resist the substitution of consumption for participatory experience.
Kiez Burn is devoted to acts of gift giving. The value of a gift is unconditional. Gifting does not contemplate a return or an exchange for something of equal value.
Our community values creative cooperation and collaboration. We strive to produce, promote and protect social networks, public spaces, works of art, and methods of communication that support such interaction.
Our community values creative cooperation and collaboration. We strive to produce, promote and protect social networks, public spaces, works of art, and methods of communication that support such interaction.
Feel free to add/edit/delete this Google Doc. I'm not really sure what direction to go with this. I'm also aware that not all these Dreams actually gained their target funding.
Owl Mon 30 Mar 2020 2:01PM
Hi @Alexxx , @Jeff Spirlock , I haven't got a response yet from our tax consultant. What we had worked with to position our events in the idealistic sector for the non-profit Berlin Burner e.V. is this description we initially gave to the tax consultant (Deepl translation):
The event "Burning Bear" is organized by the Verein Berlin Burner e.V. as a larger gathering for the winter and was planned in order to fill a gap in the regular series of events organised by other art activists at home and abroad. Most of the events for Burning Man-interested and active people take place in the warmer seasons all over Europe.
For this purpose a place had to be found that was big enough to gather more participants and interested people than the pure club members. At the same time the participation fees for participants and members of the association should be kept low. The best possible place for such an event was found in Beesenstedt near Halle in a small castle.
Beesenstedt itself is a small village where there are neither larger restaurants nor accommodations. Therefore the members and participants had to be accommodated and catered for in the venue itself. As parking facilities are also very limited, members and participants were also offered bus transportation to take part in the event.
In the castle itself, the event "Burning Bear" took place three years in a row (2016, 2017 and 2018), each time on the last weekend in February.
Here, art installations were presented and workshops were held together to present artistic and social topics. Music, drawing and other handicraft workshops took place, in which participants from home and abroad could offer their artistic interests and skills themselves, learn from others or exchange ideas together.
This is similar for Kiez Burn, and that's what the tax consultant is working with.
Another interesting piece I found is that the German LARP federation is running a law suit against the NRW tax office. They want to get LARP events recognized as a form of theater, and therefore use the reduced tax fee. They said that unfortunately the law suit will take another 3 to 8 years from now, but I try to get their argumentation line. An advice I already got from them:
Hallo Holger, wir empfehlen übrigens mit 7% Vorsteuer offiziell zu veranstalten und mit 19% zu kalkulieren. Es gibt Fälle, bei dem das Finanzamt das so anerkennt. Wenn nicht, hat man das Geld trotzdem eingenommen und kann das ohne Verlust bezahlen. Dann schreibt man einen einfachen Einspruch und hängt sich an die Klage dran. Unser Ergebnis geht dann auf Euch über - sofern die Voraussetzungen der Con vergleichbar sind. Das ist so die Idee dahinter. Bei Fragen können wir auch einfach mal telefonieren. (Hello Holger, by the way, we recommend to officially organize with 7% input tax and to calculate with 19%. There are cases where the tax office accepts this. If not, you have taken the money anyway and can pay without loss. Then you write a simple objection and attach yourself to our law suit. Our result is then passed on to you - if the conditions of the Con are comparable. That is the idea behind it. If you have any questions, we can also just phone.)
Matt Tue 31 Mar 2020 11:03AM
I wonder what kind of tax classification applies to the all sorts of LGBT street / pride-type events that pepper the summer calendar in Berlin — CSD, Motzstrassenfest, Folsom, etc. If their organisers managed to sneak them into the 7% bracket, then perhaps that’s a category from the tax man’s famous “book” that we must emulate. Sure, I know these events don’t charge their participants a fee (ticket, membership, whatever). But objectively, rationally, and manifestly, they are far more commercial than we’d ever be — they have vendors and sponsors. Yet I’d be surprised if they weren’t taxed at 7% since they serve the greater good and involve some sacred cows. I’m speculating, of course — but if I’m right, it would be interesting to know what rubric in the tax book they’re filed under.
Jeff Spirlock Sun 5 Apr 2020 11:10AM
I'm hoping my translation efforts were fairly accurate so my interpretation was relevant. I will continue my research with both the LARP & LGBTQ resources listed above.
One thing I did when I started my domestic non profit in the US was to gain a good understanding on what would qualify me for the future tax deductions I desired so I could eventually be approved for the federally recognized 501(c)(3) non profit status and designed my business model around the tax code. Domestic non profits and 501(c)(3) have huge differences in tax breaks but to gain your 501(c)(3) you must operate your business as a domestic non profit first and remain in good tax standing with the state before they will consider the federally recognized non profit status. The process typically takes a minimum of 3 years in the specific state I held a business license in. I know Germany and the US are not the same, I'm just giving some background on the hoops one must jump through for large tax breaks in other countries.
Venue Rental - Freiland
a) the leasing and leasing of real estate, allowances to which the provisions of civil law on real estate apply, and state sovereign rights that relate to the use of land,
Kiez Art & Culture
a) the turnover of the following federal, state, communal or communal organizations: theaters, orchestras, chamber music ensembles, choirs, museums, botanical gardens, zoological gardens, zoos, archives, libraries and monuments of architecture and horticulture. The same applies to the turnover of similar establishments of other entrepreneurs, if the competent state authority certifies that they fulfill the same cultural tasks as the institutions specified in sentence 1. The turnovers of stage directors and stage choreographers at institutions within the meaning of sentences 1 and 2 are also tax-free if the responsible state authority certifies that their artistic achievements directly serve these institutions. Museums in the sense of this regulation are scientific collections and art collections,
b) the organization of theater performances and concerts by other entrepreneurs if the performances are provided by the theaters, orchestras, chamber music ensembles or choirs referred to in letter a,
a) the services of private schools and other general or vocational institutions directly serving the school and educational purpose,
bb) if the competent state authority certifies that they are properly preparing for a profession or an examination to be taken before a legal entity under public law,
a) the lectures, courses and other events of a scientific or educational nature, which are carried out by legal entities under public law, administrative and business academies, adult education centers or institutions that serve charitable purposes or the purpose of a professional association, if the income is predominantly for the Coverage of costs used
b) other cultural and sporting events, which are carried out by the entrepreneurs mentioned in letter a, insofar as the fee consists of participant fees;
Benefits of youth welfare according to § 2 paragraph 2 of the Eighth Book of the Social Code, taking into care according to § 42 of the Eighth Book of the Social Code and services of adoption mediation according to the Adoption Mediation Act if these services are provided by public youth welfare agencies or other institutions with a social character. Other institutions with a social character within the meaning of this regulation are
b) Facilities insofar as they
cc) Provide childcare services for which they are suitable in accordance with Section 23 (3) of the Eighth Book of the Social Code, or
Are tax free too
a) the implementation of cultural and sporting events if the performances are provided by the beneficiaries of the youth welfare themselves or the proceeds are mainly used to cover the costs and these services are closely related to the services described in sentence 1,
a) if it is exercised for legal entities under public law or
b) if the remuneration for this activity consists only of reimbursement of expenses and reasonable compensation for missing time;
Kiez Financial Structuring - Verein
other services provided by independent, domiciled associations of persons, the members of which are engaged in a non-profit-making activity or a public-benefit activity that is exempt from tax pursuant to numbers 11b, 14 to 18, 20 to 25 or 27 its members resident in Germany, insofar as these services are used for direct purposes in the performance of these activities and the association merely requires its members to be reimbursed the exact share of the respective common costs, provided that this exemption does not lead to a distortion of competition.
Is the Finanzamt the "competent state authority" who we need certification from to qualify?
Paul aka Khromo Sun 1 Mar 2020 7:37PM
Nah, we'll just invite them for a yoga and cacao ceremony. Then get the high, throw on some psytrance and we're sorted!
walto Sun 1 Mar 2020 11:52PM
we would need a content summary by the end of March, the latest. @Alexxx do you remember what the timeline on this was? (ideally also updated in the main thread)
Jeff Spirlock Mon 2 Mar 2020 7:17AM
I'm interested in helping I was just waiting on feedback so I could better formulate my approach. My German is mediocre though so I would need someone to translate the final product as translator apps often aren't the best with grammar and phrasing.
Alex Kaos Mon 2 Mar 2020 9:59AM
Thanks Jeff, that's very kind.
Unfortunately I think the Finanzamt don't want a conceptual writing, but more a program of what was actually held at the event. They really don't care that much at what most of us call Art, and have very strict regulations in what defines art (generally performance orientated, installations and other art is actually a grey area. They expect 'professional artists' to be paid by invoice to justify this cleanly).
They really don't give 2 craps on our relation to burning Man. And actually highlighting that point would likely be detrimental to this cause based on the probability that our tax officer has most certainly not been to burning Man, and will call it a festival (also another reason that the definition used for the event (festival/burn) will unlikely prove any useful results with them).
Just to clarify, they're actually quite nice at the Finanzamt mostly, but they have a book that defines what all of this means.
Alex Kaos Mon 2 Mar 2020 10:01AM
Actually it is. But what's more relevant is that we pay artists by invoice. Not that is big and fancy ;)
walto Mon 2 Mar 2020 10:24AM
@Alexxx what is your advice then if you say that performances, installations and other art is grey area and we actually need invoices paid to professional artists?
walto Mon 2 Mar 2020 5:14PM
There is no real documentation from the Finanzamt unfortunately.
We only got the briefing from our tax advisor that we need a written summary of the artistic and cultural things that happened at the event. He will then see if that will qualify. So the "task" as I see it, is to filter the dreams and workshop booklet for the more artistic or cultural events or installations or perfoances etc. Then put that into a Google doc. That Google doc can then be presented to our tax advisor.
I am not sure where the receipt thing is coming from. That wasn't part of the what we heard from our tax advisor. Alex would need to give info on that and from my point of view, should not be part of the 2019 briefing.
Jeff Spirlock Thu 12 Mar 2020 10:01AM
I don't think what I made will convince them. I was really hoping this book the Finanzamt has outlining the tax guidelines was available online so I could understand it from their viewpoint. I'm not currently in Germany otherwise I would go to the office in person to try and read the official guidelines. From a cultural standpoint I did not find any similar festivals that were a Verein when I did an online search. There are specific aspects of Kiez Burn that may be comparable to festivals getting a 7% tax. Yoga and wellness festival for example. I know there aren't invoices from last year but maybe someone could create something similar outlining the distribution of funds to individual projects. I agree that having a background of the specific artist behind a Dream would be good information to include. I appreciate the additional information.
Alex Kaos Sun 22 Mar 2020 7:33PM
Thanks for all the work Jeff, it's good to see someoen helping out on this topic.
As Holger said, the finanzamt are quite traditional and prefer their classifications relative to concepts they are aware of. For more info, here is the official Tax Document for German taxes in the cases of 7% VAT
When it comes to art, they are quite specific about performance art (specifically theater), art gallaries are mentioned, and all other forms of art have a giant question mark above them it seems.
I've spoken with the Tax Advisor again, and he thinks it is highly unlkely that we will get the 7% calssification, but I will take your words (translated) and a slightly filtered copy of the sheet with the Dreams on it for them to review. The tax office will be reviewing all the refunds, so they have as good an overview of our outgoings as anyone tbh.
If you can think of anyone who's experienced these things before, or has some experience in these matters, it might be good to still reach out and ask their advice. We're asking everyone at the moment!
Thanks again for your help!
Owl Sun 22 Mar 2020 7:42PM
Hi Alex, we had during the week a phone call with our tax consultant. In the case of the Berlin Burner e.V. the tax strategy is a bit different since we are a non-profit. The tax consultant wants to go with the strategy that all of the income is for the "idealistic" realm to keep away tax discussions. If that wouldn't work he was expecting a 7% tax applied (and than we have to hold against that all 19% bills). Unfortunately he didn't laid out the argumentation he would use for the tax agency, but I'll contact him again if he can send it to me.
Alex Kaos Sat 28 Mar 2020 11:55AM
Excellent Holger, thank you so much for chiming in here.
I will be meeting with the Steuerberater soon to discuss how to move forward, but he is simply not confident that our case will pass with the Fianzamt. Still, it would be lovely to have your written explanation if possible, please send it to me as soon as you have it. MFG
Jeff Spirlock Mon 30 Mar 2020 6:14PM
It took me a couple weeks to wrap my head around the reality of my situation. I'll start looking into this further. I appreciate the additional information.
Owl Tue 31 Mar 2020 11:19AM
A bit more tips from the LARPers: There's an article somewhere about whether the Burning Man passes for a larp because it has so many similar approaches. The basic approach of the lawsuit is that we're looking at a new form of improvisational theater where the actors are actors and audience at the same time. Master thesis "Is Larp Theater" by Carl-David Habbe, which is answered with yes. Hence art, hence 7% VAT. ("Da gibt es irgendwo einen Artikel darüber, ob das Burning Man auch als Larp durchgeht, weil es so viele ähnliche Ansätze hat. Der Grundansatz der Klage ist, dass wir auf eine neue Form des Improvisationstheaters abstellen, bei der die Akteure Schauspieler und Zuschauer zugleich sind. Masterarbeit "Ist Larp Theater" von Carl-David Habbe, die mit ja beantwortet ist. Daher Kunst, daher 7% USt.").
I'll try to find the mentioned article.
Alex Kaos Tue 31 Mar 2020 5:07PM
Very cool. Yes send me the article if you can find it, I just messaged our steuerberater with what you shared here, hopefully he is responsive and knows something of what we speak.
Jeff Spirlock Sun 5 Apr 2020 11:04AM
I don't know how hiring attorneys work (for example if they offer free consultations or not, nor am I aware of how the bill) in Germany but if it is possible to schedule a free consultation appointment with the attorneys that handle any of those events that could be helpful. Dependent on their fee a paid consultation or adding them to the budget to have a Verein experienced attorney that is currently getting other events the 7% tax could really be helpful in gaining knowledge on what is needed to qualify for that 7%. Meaning maybe Kiez Burn has already followed the proper guidelines and we just need to document it in a specific way. And those documents may not be hard for a professional to create. I'm going to begin my research on these individual groups and events to gain further clarity of what we may do to reap similar tax status.
Alex Kaos Mon 2 Mar 2020 2:34PM
If we had that we wouldn't need the program to prove what we do.
I think what we need is some way to show that what we do is a cultural event. Specifically that our event is not music orientated, but that the Art Projects are a key element of the experience, and effectively the primary reason that participants buy a ticket.
One thing that could work would be:
"Look what we had at Kiez Burn 2019" - Highlighting the performance and art projects as the main attractions of the event. A small booklet or newsletter/email could suffice, or a page on the website.
This could also/alternatively be an 'export' from the Dreams Platform 2019, with description and pictures. It might be a good idea to filter this to the more Art and Performance orientated projects, but might not need to. It's hard to say before we are sat in discussion with the Investigating officer. That will be on the 1st April, which is our hard deadline.
Owl Mon 2 Mar 2020 3:00PM
I think that would be a good start. Maybe we could talk to the more "classic" artists in our community to set up "Letter of intents" for their (or their work's) apperance at Kiez Burn, combined with professional resumes)? Do we know how restricted the tax officers cataloge of art forms is?
Jeff Spirlock Mon 2 Mar 2020 4:24PM
Can you post a link to the official Finanzamt information regarding this?
If I don't use my business bank account to make purchases and file the receipts with my tax return the IRS (similar to Finanzamt I'm guessing) doesn't really care. This isn't for Germany but it sounds pretty similar to what Kiez is facing.
In your opinion is this even possible to do this year? Or would this be something to work towards next year? Time management matters.
Is it common in Germany for a festival to be a non-profit business? Or am I misunderstanding what a Verein is? I know they exist but is that the majority of festivals?
In the US a non-profit organization is something worth having a tax person who is experienced in this specialty. My business was a non-profit that specialized in circus and fire performance.
I know this event isn't in the US but the bureaucracy is quite similar.
walto Sun 1 Mar 2020 6:28PM
The briefing we got from our Tax advisor was to make a content summary for the Finanzamt of the art, performances, theater,... that happened at Kiez Burn 2019. We'd be very thankful if someone would want to take on this task :)
Owl Mon 9 Mar 2020 10:48AM
thanks for your step forward. I like the description of your culture that you wrote. But I'm a bit unsure if it would convince the tax office. The approch to sell them our culture is probably less effective since German bureaucracy normally doesn't try to embrace things and concepts which are new to them, but they usually just check if what they see fits in what they already know (and have comparisons for). So from my sight it could be easier understandable for them how what we do fits into classical categories with artistic approach, like: painting, sculpture, theater, life music concerts, DJs creating new music by mixing. We could also try to collect as many names and bios of participants which work as professional artists (since we can't show paid contracts).
One guideline we have which is known to the tax office is the mission statement of the verein . I think the better we can fit whats happening at Kiez Burn into these purposes, the better:
Purpose of the association is the promotion of art and culture. The purpose of the statutes is realized in particular by:
Organization of artistic events such as exhibitions, performances,
Concerts, self-experience or artist workshops
Granting of grants and grants for the preparation, presentation, presentation, storage and conservation of works of art or projects of literature, music and other cultural expressions, regardless of whether they are material or digital. The scholarships are open to the public, tenders and procurement directives are appropriately published.
Hire or operate workshops, studios, events and showrooms and depots, maintenance of art collections.
Organization of information events, publications and corresponding Internet activity.
Training, instruction and exchange of experiences of artists, musicians, cultural workers and interested people.
Establishing contacts with other artists, musicians, artists and artists
Communities of same.
We from the Berlin Burner e.V. board (with a similiar mission statement) will have a meeting with our own tax advisor next week to discuss our like-wise challenges. Maybe we can get more tips and ideas from that. I'll report.
Owl Sun 1 Mar 2020 5:39PM
Maybe. It could also be that we could get an recommendation letter (which might need to be translated for the Finanzamt). But it could as well be that this would be also irrelevant.
walto Sun 1 Mar 2020 4:44PM
It is completely irrelevant if we are an official burn or not, for the Finanzamt.
Owl Sun 1 Mar 2020 1:55AM
I (in my role as RC) will support the move to make Kiez Burn an official Burn. There was already a very late attempt to start the process for the Burn Night, but especially if it could be used as an argument for authorities, we’re moving a bit away from a former “we don’t need it” 🙂
walto Sat 29 Feb 2020 6:00PM
Thank you for your response.
Is being a Verein in itself not proof about the intentions of providing cultural contributions? ==> no, not for income related to an event the Verein organizes
Has an attempt ever been made to get the 7% tax vs 19%? ==> no, 2019 was the first year we were our own Verein, first year we paid taxes.
Are there specific reasons the 2019 program was deemed insufficient at proving this event is about arts and culture? ==> it is long, completely in English and contains a lot of stuff that the Finanzamt would not deem "cultural" or "artistic". in addition, it does not contain the art projects funded through the Dreams project. We need to make something shorter & more easily understandable for the Finanzamt.
Jeff Spirlock · Sat 29 Feb 2020 10:36AM
The obvious things that jump out to me would be first and foremost stop calling this a festival, officially or in casual conversation. You sound like sparkle ponies. When I hear the word festival I think of profit. When I hear burn I think community and art. Regardless of the cultural value of a festival, in my opinion, when an entity is profiting from an event it is less about the culture and more about the profit they stand to make. It is a business and if they do not turn a profit it will not continue to exist. To my understanding that is not how this event is structured and making that clear distinction is very important. Secondly, I would make it clear that this is an unsanctioned burn. Being unsanctioned would allow Kiez it's freedom to be different from sanctioned regional Burning Man events. This would allow the use of over 100 different events worldwide as examples about how this is a cultural and artistic contribution. To my understanding this is a bit controversial because I am not sure anyone agrees about aligning with the Burning Man Community. Borderlands is a sanctioned Regional Burning Man event in case people are unaware.
What is with the name Kiez Burn then?
I for one would not even be involved in this discussion if this event wasn't related to Burning Man. Not because it doesn't interest me but because that is how I found it. I Facebook searched Berlin Burners and this was the event it led me to.
Is being a Verein in itself not proof about the intentions of providing cultural contributions?
Has an attempt ever been made to get the 7% tax vs 19%?
Are there specific reasons the 2019 program was deemed insufficient at proving this event is about arts and culture?