"Existence-threatening requirement": Too social for the tax office: Lemonaid is threatened with additional tax payments in the millions

Lemonaid and the German authorities - this will no longer be a love story.

"Existence-threatening requirement": Too social for the tax office: Lemonaid is threatened with additional tax payments in the millions

Lemonaid and the German authorities - this will no longer be a love story. In 2019 and 2020, various authorities threatened to revoke the status of the trendy drink as a lemonade because there was not enough sugar in it. The sugar fare and the Hamburg company's fight for a revision of the beverage guidelines attracted nationwide attention. Now Lemonaid has trouble with the authorities again.

But this time not because it's too healthy, but too social. Because of its financial commitment to social projects, Lemonaid is threatened with additional tax payments to the Hamburg tax office in the millions. "The demands of the tax office are threatening our existence," says Lemonaid founder Paul Bethke to the star. "We are being punished for doing too much good."

What sounds absurd has the following background: The beverage company Lemonaid sees itself as a social enterprise and transfers 5 cents for every bottle sold to the independent and non-profit organization Lemonaid

However, this sponsoring for a good cause is apparently not really provided for in German tax law. In any case, the Hamburg tax office complained in the context of a tax audit: In order to be recognized as sponsoring, there was a lack of "quid pro quo from the association". Therefore, in the eyes of the authorities, it is a "hidden profit distribution" by the beverage company, writes the tax office. Even as a donation, he could not sell the financing of the association in the high volume and the contractually agreed continuity, says Bethke.

The result: for the audit period from 2015 to 2017 alone, the tax office demands an additional payment of 650,000 euros. If Lemonaid accepts and the demand is subsequently extended to all years since the sponsorship has existed, the Lemonaid makers would have to transfer more than three million euros to the tax office, Bethke calculated. "We don't have this money," says Bethke, because, as promised, it was transferred to charitable project partners in countries such as Rwanda, India, South Africa and Mexico.

The Lemonaid boss criticizes the fact that sponsoring a Formula 1 racing team or football club in Germany is almost unrestricted, but that there is allegedly no return when supporting a non-profit association. That is not understandable. "There is value for society and there is value for us as a brand," says Bethke.

He sees Lemonaid as a precedent for modern social enterprises in general, for which tax law has apparently not yet been made. And this despite the fact that the government actually wanted to support social enterprises according to the coalition agreement. His consequence: "This absurd legal situation must finally be changed."

Lemonaid has been in contact with the tax office for over a year to find a solution, but they insist on the payment. Therefore, Lemonaid is now going on the offensive with a petition to the German Bundestag. It says: "The previous legal situation hinders the work of social enterprises in a way that is sometimes threatening to exist and puts them at a clear disadvantage compared to purely profit-oriented companies." The letter addressed to the Petitions Committee therefore demands: "The German Bundestag should create the legal basis for the financial support of charitable purposes by social enterprises to be recognized as tax-deductible expenses."

In order to collect the necessary signatures for the issue, Lemonaid is launching a campaign this Monday under the motto "Officially tip something" that is intended to bring the topic into the public eye. Some well-known artists such as Clueso, Matthias Schweighöfer and Joko Winterscheidt have also promised to support the campaign, says Bethke. The big goal: As in the past with the topic of sugar, attracting so much attention that a good cause is not officially obstructed.

Which: Petition

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