FG Münster facilitates congresses of patient organizations

Only small flat-rate tax on income through accompanying exhibition
The Finanzgericht (FG) Münster wants to help charitable patient organizations organize congresses. Revenues from the stand operators of an exhibition organized on the margins of the congress are then subject to a favorable lump-sum taxation, as the FG in a decision announced on Monday, May 15, 2017 decided (Az .: 15 K 2127/14 AO). But it allowed the revision to the Federal Finance Court.

Large patient organizations often organize conventions, such as informing their members and other patients about important medical innovations. On the sidelines of such congresses, there is often an exhibition where pharmaceutical and equipment manufacturers show visitors their products. Patients can also get a quick overview here, and the patient associations can partially finance the congress by holding fees.

(Image: stockpics / fotolia.com)

The congress itself remains tax-exempt as a so-called "Zweckbetrieb" because it serves the purpose of the association directly. However, such an exhibition is considered a business enterprise for which the association must pay corporation tax. However, the law favors income of non-profit associations through "advertising for companies, which takes place in connection with the tax-privileged activity (...)". In that case, only 15 percent of the revenue will be taxed as a taxable profit. A classic example of this is the jersey and gang advertising in sports.

In case of dispute, the patient association organizes a medical congress every two years and an exhibition, especially for pharmaceutical companies. At the congress in 2011, the club took just under 40,000 euros stand fees and estimated accordingly just under 6,000 euros (15 percent) as a profit.

The tax office wanted to tax the revenue regularly. Because the club had no "advertising for companies" operated, but have only provided space on which the companies themselves can promote themselves. The tax office based on a corresponding judgment of the FG Hamburg of 16 June 2006 (Ref .: 2 K 10/05).

This contradicted now the FG Münster and equaled the stand fees the direct advertising revenue. In both cases, the facts are similar. In sports, there could be the jersey and gang advertising only because tax-privileged sporting events take place. Accordingly, the manufacturer's exhibition is conceivable only with the tax-privileged congress, because the stand operators want to address the congress visitors.

Because of the contradiction to the Hamburg judgment, the FG Münster, however, against this judgment of March 22, 2017, the revision of the Federal Finance Court in Munich. mwo / fle