Tax exemption for music lessons

A change in the law means that in future a certificate from the competent authority will no longer be required for VAT exemption for music lessons, but this will lead to uncertainty about the future tax treatment.

Everything that is used for school education and training - whether for children or adults - is exempt from VAT. Anything that is purely recreational, on the other hand, is subject to VAT. Music lessons provided by music schools, music clubs and self-employed music teachers fall into the first category and are therefore exempt from VAT. The Annual Tax Act 2024 is now set to reform the regulation on the tax exemption of music lessons: In order to reduce unnecessary bureaucracy, tax exemption will no longer require a certificate from the competent authority confirming that the teaching content is exempt. In future, the competent tax office will decide whether it is a tax-privileged educational benefit or a mere leisure activity.

This has led to uncertainty among those affected, who are wondering how music lessons will be assessed for tax purposes in the future. According to the Baden-Württemberg Ministry of Finance, everything will remain the same despite the new version. For music schools, music clubs and self-employed music teachers, nothing will change from a tax perspective. The music lessons they provide will continue to be exempt from VAT in the future. However, the state wants the federal government to clarify this. Baden-Württemberg has therefore submitted a motion to the Federal Council's Finance Committee, which it passed on September 12, 2024. The state is calling on the federal government to clarify that nothing will change for music lessons under VAT law as a result of the Annual Tax Act 2024.