Can influencers deduct their clothing from tax?

One profes­sional group that has repea­tedly found itself in court in recent years is that of influen­cers — be it due to unla­belled product place­ments or even surrep­ti­tious adver­ti­sing, disputes over so-called influencer contracts or media-effec­tive conflicts with colle­agues who also work as influen­cers.

This time, the tax office was in dispute with a fashion blogger who wanted to claim her expenses for clot­hing and access­ories as busi­ness expenses (income from busi­ness opera­tions) in her tax return.

The clai­mant operated her blog on various social media chan­nels and via her own website and regu­larly created photos and stories as part of this.

In addi­tion to various goods that the influencer received from various compa­nies in order to adver­tise them, she purchased items of clot­hing and access­ories with her own money and also presented these as part of her acti­vi­ties on the plat­forms she used.

She wanted to reco­g­nise the corre­spon­ding expenses as busi­ness expenses in accordance with Section 4 (4) of the German Income Tax Act (EStG).

Clai­ming clot­hing and access­ories as busi­ness expenses sounds too good to be true? Accor­ding to the judge­ment of the Lower Saxony Tax Court of 13 November 2023 (3 K 11195/21), it is:

The 3rd Senate of the Lower Saxony Tax Court essen­ti­ally followed the reaso­ning of the defen­dant tax office.

The problem in this case lies in the provi­sion of Section 12 No. 1 EStG. Accor­ding to this provi­sion, amounts paid for the taxpay­er’s house­hold and for living expenses incurred as a result of the taxpay­er’s economic and social posi­tion may not be deducted from the taxpay­er’s income. This also expressly applies if the expenses are incurred to promote the taxpay­er’s profes­sion or acti­vity.

Exactly such a constel­la­tion existed in the legal dispute to be decided by the tax court. Accor­ding to the Senate, it is not possible to sepa­rate the busi­ness and private spheres in the case of “ordi­nary civi­lian clot­hing and fashion access­ories”. Irre­spec­tive of the actual use, the obvious possi­bi­lity of private use of these items of clot­hing means that they cannot be reco­g­nised for tax purposes.

Typical work clot­hing, for which a busi­ness expense deduc­tion is possible, can only be assumed if, accor­ding to its objec­tive nature, it is almost exclu­si­vely intended and suitable for profes­sional use and is neces­sary due to the nature of the profes­sion or for which the profes­sional use already follows from its nature either through its distin­gu­is­hing func­tion or through its protec­tive func­tion.

In other words, cons­truc­tion workers or chimney sweeps are unli­kely to wear their work clot­hing in ever­yday life simply due to its nature and purpose — it is simply typical work clot­hing. In such cases, a busi­ness expense deduc­tion can certainly be considered. In the case of an influencer who pres­ents and adver­tises ever­yday clot­hing, it cannot be ruled out that this clot­hing is also used priva­tely.

Are you an influencer, content creator, or in a similar role and have ques­tions about tax law, criminal law, or tax criminal law? Then you’ve come to the right place. We specia­lize in these areas and offer you compre­hen­sive advice—whether it’s preven­tive guidance or repre­sen­ta­tion in ongoing procee­dings. Rely on our exper­tise and expe­ri­ence as your trusted and specia­lized partner. Feel free to contact us—we’re here to support you.