VAT on donations, gifts and “support” from influencers?

Donations, “tips”, “support”: On Twitch, YouTube and in many other creator ecosystems, voluntary monetary payments are an everyday part of monetization. From a VAT perspective, however, this is a minefield – not because of the terminology (“donation” is not a legal term), but because of the core question of VAT law: is there an exchange of services, i.e. other services for consideration?

Especially in the case of influencers and streamers, the result can vary depending on the structure: from a non-taxable subsidy to full VATable remuneration – with the risk of subsequent payment, interest and possible consequences in accounting.

The legal touchstone

The starting point is Section 1 (1) no. 1 UStG: VAT is incurred for supplies and other services that an entrepreneur carries out in Germany in return for payment. In the case of donations, the decisive word is therefore not “voluntariness”, but rather “payment”.

For decades, case law has worked with a European model: a service is only provided “for consideration” if there is a direct connection between the service and payment – typically supported by a legal relationship in which mutual services are exchanged.

The classic case here is the “street musician” judgment of the ECJ, Case C-16/93 (Tolsma): Voluntary payments by passers-by to a street musician were not treated as remuneration because there was a lack of a sufficiently specific consideration and a reliable exchange relationship.

At first glance, this sounds like a good line of argument for donations. However, digital platform economies are not a pedestrian zone – and this is precisely where the more recent financial court line comes in.

Düsseldorf tax court: Donations for streaming as remuneration subject to VAT

A particularly practice-relevant decision is the ruling of the Düsseldorf tax court from 04.03.2022 – 1 K 2812/19 U. This concerned “donations” that viewers voluntarily paid to a streamer on a streaming platform. The court qualified these payments as remuneration within the meaning of sec. 10 para. 1 sentence 2 UStG for other services (sec. 3 para. 9 sentence 1 UStG) – specifically: entertainment services.

The core ideas (abridged) are crucial for practice:

• Identifiable service recipients: Paying viewers can be individualized (name/message/payment method).
• Legal/user relationship via platform rules: By using the platform conditions, a legal framework is created in which the viewer specifically consumes entertainment.
• Direct connection: The payment is causally based on the specific entertainment received; the donation is appreciation for a specific service consumed.
• Voluntariness does not harm: Voluntary payments can also constitute remuneration if there is an “internal link” between performance and payment.

This makes it clear that in a classic streaming setup with alerts, community interaction and “support” logic, there is a considerable VAT risk, even if the payment appears “voluntary” from the viewer’s perspective.

Berlin-Brandenburg tax court: “Genuine grants” for voluntary financing?

The opposite line from Berlin is exciting: In a case concerning voluntary payments to finance a freely accessible online offering (donations/sponsorships/crowdfunding character), the Berlin-Brandenburg tax court denied an exchange of services and classified the payments as non-taxable genuine grants. Various dates circulate in practice; the following is reliable: The BFH expressly refers to the ruling of the Berlin-Brandenburg tax court dated 25.04.2024 – 2 K 2085/21 as the lower court ruling.

Important: This is not “the final solution”, as the BFH has allowed an appeal to clarify precisely this basic question in its decision of 19.05.2025 – V B 25/24 (pending under V R 10/25).

This results in a differentiated picture for Creator models:

• Streaming donations (interactive, performance-related, consumption-related) tend to be taxable according to the Düsseldorf tax court.
• Financial contributions for a generally freely accessible offer without a specific consideration can – depending on the setup – be classified as genuine grants, whereby the BFH will still set the final guidelines.

Practical risk factors

In tax audits, there is rarely an abstract discussion about “motivation”, but rather about objective indicators that make payments appear “close to performance” for VAT purposes. Typical triggers are

1. Alerts/thanks/name-reading in the stream (individualization of payment and “reactive consideration”).
2. Interaction as a product feature (chat responses, personalized reactions, “shoutouts”, community rituals).
3. Benefits/Perks – also informal: highlighting, rankings, “Top Donator”, special emotes/badges, access to Discord areas, exclusive content.
4. Communication that frames donations as a quid pro quo (“support for more content”, “goal reached, then…”), in effect establishing a performance logic.
5. Systematic monetization via platform mechanics: If the channel is recognizably operated as a “virtual store” for entertainment, this fits very well with the reasoning of the Düsseldorf tax court.

The frequent reflex (“Then donors are written to and asked about their motivation”) is usually only of limited help from a VAT perspective: VAT is not primarily linked to the subjective motives of individual payers, but rather to the objective structure of the offer and the payment reality as the equivalent value for consumable services.

Legal expenses insurance in the event of an impending external audit

The question of commercial legal expenses insurance regularly arises in practice when an external audit is announced and a point of dispute is foreseeable. Experience has shown that two points are central to this:

• Cover for tax disputes is not standard. A “tax legal protection” module is regularly required (sometimes with a narrow scope; tax audits and pure “determinations” are limited depending on the conditions).
• Pre-contractuality/foreseeability: Insurers often check whether the “legal protection case” (or its germ) was already in the pipeline. An external audit that has already been announced can – depending on the terms and conditions – be assessed as an increase in risk or as a conflict that has already arisen.

Consequence: Legal protection can be useful, but should not be planned as a safe cost brake without specifically checking the terms and conditions for external tax audits / appeals / legal proceedings.

A legally clean conclusion for influencer settings

“Donations are always subject to VAT” is just as imprecise as “Donations are always genuine donations”. The exchange of services is decisive:

• In the case of the classic streaming model, the currently published tax court line strongly favors VAT liability (Düsseldorf tax court).
• In the case of voluntary financing of a generally accessible offer without individualizable consideration, there is a contrary tendency (Berlin-Brandenburg tax court), but the BFH clarification is pending.

Precisely because several revenue streams (advertising, affiliate, subscriptions, sponsoring, donations/donations, merch) often run side by side in creator practice, a single misclassified block – such as EUR 30,000 in donations over several years – can quickly become the dominant point of contention in an external audit.

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Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.