Non-consideration
Non-consideration covers flows of funds with no supply in return: subsidies, donations, dividends, damages, or contributions that are not paid for a specific service; they are not subject to VAT.
Definition
The line is more delicate than it sounds. A sponsorship payment with something in return — logo, mention, advertising space — is consideration and taxable; a donation without a return is not. Associations and cultural bodies decide this question afresh with every payment.
Subsidies additionally lead to a reduction of the input tax deduction: they are not taxable themselves but reduce the entitlement to deduct proportionally. Whoever overlooks this deducts too much input tax.
Where to read it
What the software must be able to do
You need a tax code without tax that triggers the input tax reduction where a subsidy exists. In association software, separating membership fees, donations and sponsorship is the real check.
Checked Aug 2026
More terms under VAT and customs: Acquisition tax Customs declaration Effective method Exempt supplies Flat-rate VAT method Input tax Margin taxation Own use Place-of-recipient rule Reduction of consideration Takeaway 2.6 vs. eat-in 8.1 Value added tax VAT 3.8 % accommodation VAT 8.1 / 2.6 / 3.8 % VAT liability