Taxes - No cake tax at schools and daycare centers in NRW
Cake sales at school parties or admission fees for performances by school groups such as the theater club remain exempt from VAT in North Rhine-Westphalia. The stricter EU legal requirements from 2025 had often led to questions as to whether, for example, occasional cake or pizza sales at schools would also have to be taxed in future, NRW Finance Minister Marcus Optendrenk (CDU) announced on Thursday. He can now give the all-clear here. Solutions had been developed that could be implemented by schools in a legally secure manner with little bureaucratic effort. "Such beautiful traditions must not be ruined by excessive bureaucracy," said Optendrenk.
Specifically, the sale of cakes by changing groups of pupils, classes or parents will continue to be exempt from VAT in future if the service cannot be attributed to the local school authority, but to the respective group of pupils or parents' initiative. The cake providers can identify themselves on notices, posters, flyers or on the internet. As a rule, they are not subject to VAT as they are not to be regarded as entrepreneurs. The regulation also applies to daycare centers or other educational institutions.
Exceptions do apply if a group regularly sells cakes or waffles on a weekly basis, for example, to top up the Abiball fund. But the ministry also gives the all-clear for such cases. This is because VAT does not have to be paid if the income in the previous year was less than 22,000 euros and is not expected to exceed 50,000 euros in the current year. Such sums are unlikely to be achieved with cakes.
The background to the debate is a new VAT regulation. Due to EU law, the public sector, i.e. the state, will also be subject to VAT from 2025. With its VAT directive, the European Union wants to prevent private companies from being put at a competitive disadvantage.
Press release
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- In North Rhine-Westphalia (NRW), the CDU-led Finance Ministry has ensured that cake sales by student groups at school events will continue to be exempt from sales tax, following EU regulatory changes in 2025.
- Düsseldorf-based Finance Minister Marcus Optendrenk emphasized that the new regulations must not hinder "beautiful traditions" and should minimize bureaucratic hurdles for schools.
- The cake sales by pupil groups or classes at schools will remain tax-free, as long as the service cannot be attributed to the local school authority but to the respective group of students or parents' initiative.
- The new VAT regulation caters to EU law, which imposes VAT on the public sector (including states) from 2025, to maintain a level playing field for private companies.
- In order to avoid VAT payment in the context of cake sales, a group should not meet the threshold of more than 22,000 euros in annual income during the previous year or have an expectation of exceeding 50,000 euros in the current year.
- The ministry has also provided an exemption for daycare centers and other educational institutions, ensuring that these institutions continue to benefit from the tax-free cake sales.
Source: www.stern.de
