31 January 20233 minute read

Copyright: Changes to the special regime for artists

In 2008, Belgian tax law introduced a specific regime for the revenues resulting from copyright and neighbouring rights. The legislator’s aim was to take into account the specific situation of artists, as the revenues and costs of an author can vary considerably in relation to the success of the books written by the author.

This special tax regime made it possible to apply a tax rate of only 15% on the first EUR64,070 revenues from copyrights. There was also the possibility to apply a lump sum evaluation of the costs equalling 50% on revenues up to EUR17,190 or 25% on revenues between EUR17,190 and EUR34,170 (all amounts are the indexed amounts). So an author earning EUR15,000 only had to pay 15% on EUR7,500 or EUR1,120 taxes.

This system was used more frequently and increasingly by people in a completely different situation than the writer or painter the legislator initially had in mind. Software engineers, architects, lawyers, and people writing manuals for machinery sold by their employer also took advantage of the tax regime.

This favourable tax regime didn’t have an equivalent for social security purposes. The normal rules on the calculation of social security contributions due under the regime for workers applied. If the organisation paying the indemnity was the employer of the person who created the work protected by copyright, this typically led to the conclusion that social security contributions were due.

Because more people used this favourable tax regime, the legislator intervened and amended it with the Programme Act of 26 December 2022.

The most important changes are a restriction of the personal scope of the tax regime. Under the new system, the author must either hold a certificate as an artist in the sense of the new Act of December 2022, or alternatively must transfer a license on the work “for communication to the public, for public performance or reproduction.” The precise scope of this condition is not clear. The finance minister gave the example of an architect drawing plans for the house of a private person. The plans wouldn’t be published, so the tax regime wouldn’t be applicable. But we might ask if it would be applicable if the architect drew up plans for a contest between architects for the construction of a new public building.

Secondly, a relative cap was introduced. The compensation paid for the transfer of copyrights should not exceed 30% of the total compensation paid to the person involved. The example given in the Parliamentary Works is a theatre director who also writes plays. The new tax regime can then only apply to 30% of the total revenues, which is deemed compensation for writing the plays. The other 70% is for other work (general management, administration), which is subject to the normal tax rates. There are exceptions where this 30% cap does not apply.

The new tax regime was published in the Official Journal of 30 December 2022.

The government announced its intention to amend the social security legislation. Revenues falling under the new tax regime (which are considered to be various revenues, not taxable revenues), would also for social security purposes not be considered remuneration, so would not be subject to social security contributions. The new social security legislation would refer only to the new tax legislation and take over all conditions.

At the timing of writing this article, no actual legislation has been published in the Official Journal.