The bake sale is a kind of institution of German educational institutions. Children and young people learn the basics of business administration, even if expenses and working hours are mostly sponsored by Mama and the business model can therefore only be applied to a limited extent in later professional life. But above all, the bake sale is a small but important filler in the financial plans of schools and kindergartens.
Not all parents can afford the class trip? How about a cake stand! No money for weatherproof chairs so that the daycare children can have snacks outside in Corona times? cake stand! The class register is empty, but the prom is coming up? cake stand! It seems like everything that costs extra is baked away in the parents’ kitchens. Even private schools are not immune to this. Waldorf schools, for example, only half ironically talk about the three big Bs of parenthood: baking, handicrafts, tinsmithing.
The decisive advantage of the bake sale concept has always been: tried and tested for decades, uncomplicated and simple. But that could soon change for public schools and daycare centers. Because from next year such sales could become subject to sales tax.
Is the baker disadvantaged?
This requires a brief digression into tax law, away from the schoolyard via Berlin to Brussels. Compared to private-sector companies, public institutions have not usually paid any sales tax, for example when the citizens’ registration office certifies a document, when the depot tends the cemetery or the fire brigade clears a tree from the street. However, the European Union wants to prevent private entrepreneurs from being disadvantaged in competition – after all, a gardener could also tend the cemetery or a private company could clear the street – and has therefore issued a value added tax directive, which in Germany is reflected in paragraph 2b of the Value Added Tax Act . This states that municipalities, ministries and district offices will also be subject to tax from 2023.
The federal states have to implement this by the end of the year. And for some reason, the topic is heating up in Baden-Württemberg – using cake as an example. If you call the Ministry of Finance in Stuttgart, spokesman Sebastian Engelmann first emphasizes that the new regulation has not grown on the crap of the country and that all countries have to deal with it. “We didn’t make that up either, but the logic of this new sales tax policy is a class that sells cakes, part of the school and school is state, so the state sells cakes,” he explains. This in turn could have an impact on what is happening on the market, because a baker could also bake and sell the cake. From a purely formal point of view, selling school cakes would be subject to sales tax. “But we are currently examining what room for maneuver we have as a country and where we can work with a de minimis limit so that there is no further bureaucracy and bake sales are not taxable.”
The moaning is still loud, in different corners. With the offices and authorities, because they now have to check everything they do: Is that a sovereign task? Or could it be taken over by a private company? Then it would be taxable in the future. Because it’s not just about the cake. A spokesman for the Ministry of Culture speaks of a “bureaucratic monster”, the President of the Municipal Council of Baden-Württemberg, Steffen Jäger, of “massive difficulties” and “pure bureaucracy”. you have to spend months checking your own processes and their relevance to sales tax,” complains Jäger in an opinion. “And that’s only so that one state level can or must pay more taxes to the other state level.”
“Somebody didn’t hear the shot.”
And of course, the excitement is also great among those who bake the cake. “I don’t even know how many parents and parent representatives have written to me,” says Michael Mittelstaedt, chairman of the state parents’ advisory board. And to the point: “Somebody didn’t hear the shot.” Nevertheless, he has to laugh on the phone first, you know that already, for a few years now it has been no longer possible to sell waffles made from homemade egg batter in schools, prefer to buy ready-made dough, pasta salad in summer: also very critical, because of hygiene and such. “If now there is also VAT, then I don’t understand it,” he says.
The school cake, it definitely seems biased.
But everyone agrees that he should stay. The Green Prime Minister Winfried Kretschmann promised on Tuesday that the new regulations “will be reduced in their bureaucracy”. One solution could be that the cake is formally sold through a support association, says Treasury spokesman Engelmann. According to the small business regulation, income of up to 22,000 euros is tax-free, “that would be a lot of cake”. The country now wants to come up with other solutions.
Baden-Württemberg could orientate itself towards Bavaria, which has already found regulations. There it depends, among other things, on who the cake sale is aimed at and how sustainable the seller “appears on the market”, in short: If a daycare center sells cakes to parents and grandparents at a summer party that is not publicly advertised, that would not be the case taxable, but the parents sell cakes every week at the market next to other stalls, then yes. It remains complicated nonetheless.
“The main thing is that people don’t have to read 20 pages beforehand,” says Mittelstaedt from the State Parents’ Advisory Board. “Because that scares them off and then they leave it altogether.” And that’s a pity, because the bake sale institution not only has the social aspect that poorer families can then afford school trips, but it’s also important for the parents: you meet, chat, get to know each other – “a really great thing”. .