A donation in kind from the company’s assets is basically a free gift that is equivalent to a delivery for a fee. Donations in kind are subject to VAT as a so-called free value tax according to § 3 Paragraph 1b UStG, provided that the item (later donated) is entitled to full or partial input tax deduction. The assessment basis for a donation in kind is not determined by the original acquisition or production costs, but by the fictitious purchase price at the time of the donation. This also applies to items manufactured in-house (so far Section 10.6, Paragraph 1, Clause 3 UStAE).
Source awb-international
