Indirect state support for the arts and culture in the form of tax breaks is not laid down in a separate piece of legislation but instead consists of a multitude of regulations contained in various specialised acts. In the case of VAT, some cultural products (such as books) are subject to a lower rate of 7% instead of the standard 19%; under certain conditions, public cultural operations and non-profit activities (e. g. theatre performances) are exempt from VAT and corporate tax altogether.
Since January 1st, 2000, an Act on the Taxation of Foundations is in force, which includes tax incentives for the establishment of and donations to foundations. In recent years, additional tax breaks have been incorporated into the law governing donations, and the tax exempt ceiling for income from voluntary activity (the so-called standard exemption for course instructors) has been raised and extended to apply to other groups.
The reform of the Law on Non-profit Character and Donations in July 2007 eases taxation of civic commitment. Amongst others, donations remain free from income tax to a limit of 20% and the tax free allowance for the establishment of foundations was raised from 300 000 EUR to 1 million EUR.
In July 2014 the German Parliament has passed a bill to reduce the taxation of audio books from 19 % to 7 % (just as printed books), it came into force in January 2015. In July 2019, the federal government passed the draft of the annual tax law. As soon as the law comes into force, e-books will also be taxed at the reduced rate of 7% (instead of 19%).