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01.03.2021

HDE and Die Grünen demands simplification for donations of unsold seasonal goods.

Together with the parliamentary group of Bündnis 90 / Die Grünen, charities and other associations, the German Retail Association (Handelsverband Deutschland, HDE) appeals to politicians to make it easier to donate to charitable organisations. For the fashion trade in particular is facing the additional problem of full warehouses due to the cancelled winter business.

Spring fashion pushes into the warehouses

“Many fashion retailers are sitting on mountains of textiles that they can no longer sell outside the winter season. And there is not enough space to store the goods. After all, spring fashion is already crowding the warehouses,” explains HDE CEO Stefan Genth. A sustainable solution is needed to deal with the hundreds of millions of unsold garments.

Durable and legally secure solution

However, according to the legal requirements, destroying the goods is often the cheapest way to make space in the warehouses. “This is a dilemma. No trader likes to destroy their goods. Many would rather donate the clothing to needy or charitable organisations. But traders whose livelihoods are threatened by the pandemic often cannot afford to do that,” Genth continued. In the case of donations, sales tax is generally due on a fictitious purchase price or replacement value. Retailers would therefore have to pay the sales tax, although they demonstrably achieved neither profit nor turnover with their donation. “This is paradoxical and requires a permanent and legally secure solution”, Genth emphasises.

The HDE therefore expressly welcomes the initiative of the tax authorities to waive the obligation to pay turnover tax on goods donated by retailers to charitable organisations within the framework of a fairness regulation until 31 December 2021

Symbolic price

For the time after that, another draft decree has been presented that is to allow the sale of unsaleable goods at a symbolic price to non-profit and charitable organisations. “Now it is important to implement both decrees promptly. Moreover, a symbolic price must not be called into question later. Otherwise, this solution approach will not prevail,” said Genth. In the sense of a long-term solution, however, a secure basis in tax law is necessary. It is disconcerting that donations have to be made possible through a fairness regulation.

Organised by Green Parliamentary Group

On 23 February 2021, the Green parliamentary group in the Bundestag brought together responsible persons from business, charities and intermediaries of donations in kind to discuss legally secure solutions for the donation of mass stockpiled goods. A joint appeal to the federal government was made ahead of the upcoming consultations on the Corona Tax Assistance Act.

Participants in the event included: Stefan Genth (pictured right), Chief Executive of the German Retail Association (HDE), Dr. Ulrich Schneider (pictured left), Chief Executive of Der Paritätische Gesamtverband, Dr. Juliane Kronen, Founder & Managing Director innatura gGmbH, Christoph Wenk-Fischer, Managing Director bevh – the E-Commerce Association, Dr. Uwe Martin-Fichtmüller, Managing Director Arbeiter-Samariter-Bund Deutschland e. V. Centre: Katrin Göring-Eckardt MdB, Chairwoman of the Bündnis 90/Die Grünen parliamentary group in the Bundestag.

 

Source: www.einzelhandel.de, www.gruene-bundestag.de

Contribution photo: Donations of unsold seasonal goods. Photo: Bündnis 90/Die Grünen

HL