Craftsmen support, for example, football, basketball, tennis, or handball clubs. (Photo: © matimix/123RF.com)
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Sponsorship is a win-win situation for both sides: the club receives money or a monetary benefit, and the tradesman gets involved with advertising boards, jersey prints, and advertisements.
During major football events like the upcoming World Cup, the whole world is gripped by football fever. But throughout the year, countless tradespeople support mostly local football, basketball, tennis, or handball clubs. Others are involved in cultural activities or take care of maintaining a well.
Sponsorship is a classic win-win situation: the club receives money or a service in kind, and the business gains exposure through advertising on the pitchside boards, jerseys, social media posts, and advertisements. It creates a positive image and, ideally, can even offer its products at the stadium. This mutual exchange of benefits is what distinguishes sponsorship from a donation.
Because sponsorship relieves the burden on public budgets, the costs can be fully claimed as business expenses for tax purposes.
The tax office considers it important that the business owner does not support their favorite club quietly and secretly. During the tax audit, it must be clearly evident that the business owner views the sponsorship as a marketing measure for their own business. The business and the club must be a good fit, the amount of the sponsorship must be reasonable, and there must be a contractually agreed-upon benefit in return.
Operations management
Operations management
Operations management
The sponsored party must therefore prominently feature the sponsor and its products on posters, event announcements, stadium announcements, newsletters, and jerseys. This is all regulated in the [relevant legislation/regulation]. Sponsorship decree of the Federal Ministry of Finance.
"It's recommended to have a sponsorship agreement that clearly outlines the services and consideration provided," explains tax advisor Klaus Ochsenfeld from Düsseldorf. "The agreement can be drawn up informally. However, the amount of the fee and the precise definition of the sponsored party's services should be clearly stated," Ochsenfeld says.
Since smaller clubs are usually run by volunteers, it can be beneficial for the organization to develop a simple marketing concept and make it available to the sponsored organization.
In sports sponsorship, the issue of advertising is relatively straightforward if the tradesman provides the jerseys or if the club prints the company logo on the advertising boards. If the local newspaper or advertising paper then reports on the company's involvement, and if the club posts pictures on its Instagram or Facebook profile, then there should be nothing standing in the way of deducting it as a business expense.
New tax exemption for certain sports aid bonuses Since January 1, 2026, premium payments of the German Sports Aid Foundation according to § 3 No. 73 EStG tax-free if awarded for placements at the Olympic or Paralympic Games. Source: ETL
Instead of a sports club, the company could, of course, also financially support a museum, a music society, or a social project. If it wants to take advantage of the tax benefits offered by sponsorship, the sponsored organization must pull out all the stops in its marketing efforts. The museum, for example, could have the company's logo printed on the admission tickets and mention the sponsor at the exhibition opening.
The important thing here is that the company is the focus and not the donor's identity. Because if the sponsorship expenses give the impression that the donor is being placed in the spotlight like a patron, the expenses can no longer be considered tax-deductible. They are then considered "non-deductible living expenses."
However, for consideration as business expenses, it is irrelevant whether the services are "necessary, customary, or expedient." The expenses may be deducted as business expenses even if the sponsor's monetary or in-kind contributions and the company's desired advertising goals are not equivalent. "Moreover, the monetary contribution does not have to correspond exactly to the value that the sponsored person gives in return," explains tax advisor Klaus Ochsenfeld.
If the company donates €700 to the club, the advertising perimeter may still only cost €500. Only if there is a blatant disproportion between the sponsor's services and the desired economic benefit will the tax office say "no" (Federal Fiscal Court ruling of February 2, 2011 (case no. IV B 110/09)). Ochsenfeld: "Alternatively, support for the sponsored party is possible through a donation, which, however, must not result in a performance obligation on the part of the club."
If a specific service agreement between the parties isn't possible, or if the contribution and the advertising measure to be provided are clearly disproportionate, a donation for discretionary use is possible. "The donation then generally also results in a tax-deductible expense for the sponsor."
Companies wishing to claim their sponsorship expenses as business expenses for tax purposes must clearly demonstrate that they view the sponsorship as a marketing measure and receive something in return. The sponsored party must therefore clearly acknowledge the company supporting them. This is most clearly achieved through jersey advertising or advertising on a banner at the sports field. Alternatives or additions include:
Apart from the tax aspect, sponsorship is particularly worthwhile if the The company and the club are a good fit. Small and medium-sized companies often distribute their sponsorship funds based on sympathy and a sense of obligation.
However, they'll do themselves a greater favor by carefully considering where their sponsorship budget should go. The facility should fit the company's image and the preferences of its customers, and it should also have a good reputation. DHB now also digital!Simply click here and register for the digital German Crafts Journal (DHB)!
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