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I'm a student and I like to build custom PCs for the people around me. Recently, a friend of mine asked me if I could build a PC for him. I created a build according to his budget, asked if it was fine for him, then proceeded to buy the parts and assemble them.

After the build was done and I gave it to him (and took the money I paid for the parts), he asked me how much he owed me for my service. I didn't know what to say, since I never asked for any money in the first place, so I just said he can donate however much he feels like.

He decided to give me 100€, because I worked roughly 8 hours on it (meaning I made 12.5€ per hour).

Do I need to pay taxes for that? If so, how do I do that? And if not, how much money could I technically earn from such donations before I had to pay taxes?

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    Depending on your country‘s legislation, accepting money for a service rendered might actually cause legal trouble if you don’t register as a business first. For example, there might be a requirement to register with a local authority, charge sales tax or even join a mandatory group for some regulated areas. And you might not even be legally allowed to provide special kinds of services without having proper degrees or certifications. So do your research before causing yourself lots of bureaucratic hassle and potential legal issues for accepting and declaring business income on your taxes.
    – Matthias
    Commented May 19, 2020 at 18:53

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I already commented about some legal "side-effects" of working for money (such as maybe needing to register as a business first or other laws). However, regarding to your question, I did some more research (assuming you are a tax resident of Austria because of the country tag).

I didn't find too much information about the topic (such as any laws which might apply), but the term of "Nachbarschaftshilfe" (i.e. "neighbourhood help") seems to be common for what you are describing. However, laws regarding that topic seem to be really strict in Austria and as soon as you accept any form of monetary (or even non-cash compensation) it might be considered illegal employment:

For example, there has been a case where someone bought a table and the seller offered help carrying said table "for free". In the end, this was deemed illegal employment and they had to pay a fine of €750 each (see Translation 3,000 euros fine for neighbourhood help). Not sure about the credibility of the source though.

A more reputable source talks about an app offering an exchange platform for this kind of "neighbourhood help": Translation: Gray area "paid neighborhood aid". They describe it as a "gray area of law" stating that:

If friends, family members or neighbors offer services free of charge and the activity is not subject to the client's constant instructions, then it is neighborhood help

In your case, if you're charging money and are not related to your friend, you might already be out of luck to consider building a PC an act of "neighbourhood help". However, they also go on to say:

It is always a question of how professional it is. Offering something once is different from saying that you have time from 12 noon to midnight every day. Then it is regular and commercial with the intention of making a profit

So I guess the "gray area" probably covers it well if you don't plan on regularily building PCs for friends and family (or even stranger) and do not intent to make a profit.

However, if someone decides that your PC-building is actually to considered "work", even your friend might be in legal trouble because:

The commissioning person must check this, however. "The client is obliged to check whether he is authorized to carry out the activity," said Sattler. In the worst case, a penalty of 3,600 euros can result if someone is hired without a business license.

Without being an expert on Austrian tax law, it sounds like you should definitely be careful accepting money for your "service". Especially if you plan on doing something similar in the future (as your question implied). Even if you both agree to call it a "donation", it might still count as income or revenue - otherwise, employers would just "donate" to their employees instead of paying salaries...). You definitely did not discover a "tax loophole" if that is what you are asking for...

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    I read through the article. Ö24 isn't the most high-quality source, but credible enough in this case. Still, it's unthinkable. Imagine being 20 years old, wanting to help someone, and then you get fined 750€ for it. What a joke...
    – MechMK1
    Commented May 22, 2020 at 9:06

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