- Culture requires financial support through donations and subsidies, both non-taxable under VAT law but treated differently for tax purposes.
- Subsidies reduce input tax, while donations do not affect it.
- A recent court case examined whether funds passed on by a foundation should be classified as subsidies or donations.
- A-GmbH, involved in film production, received funding from a foundation that replaced a public film promotion program.
- The foundation received subsidies from Zurich and was audited by the FTA, which classified the funds as subsidies, leading to a tax claim.
- Subsidies involve a behavioral commitment for public interest, while donations are voluntary.
- The court needed to determine if the foundation’s funds were intended for the complainant’s benefit or had a specific public purpose.
- The Federal Administrative Court ruled that the foundation’s funds were earmarked for public interest, indicating they were subsidies.
Source: primetax.ch
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
