European Taxes
An outline of the Tax Situation in Europe
as applicable to musicians.
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Many countries have instituted punitive - and as regards the EU, illegal - taxes targeted at foreign musicians. These taxes usually don't apply to DJs who suckle at the teat of the Musical Welfare State and whose main social function seems to be to keep thuggish children distracted with aural trinkets. As well there are various forms required by states to avoid the withholding of legitimate taxes, including social security. The following information is subject to change at any time and is not meant to be comprehensive. It only references information relevant to Pere Ubu.
If you have current information, tips or anything useful to add to this page please
email them.
FORMS PROVIDED BY US GOVT.
FORM 6166 - Supplied by U.S. Residency Certification Unit - DP N322, PO Box 16347, Philadelphia PA 19114-0447; tel: 215-516-2000; fax: 215-516-1035 or 215-516-2485. The form provides relief from double taxation. It states simply, "I certify, to the best of our knowledge, the above-named taxpayer is a resident of the United States of America for purposes of U.S. taxation." These forms are specific to the taxpayer and provide personal information.
FORM TAJA1 (S5GA1) - AKA the "Baltimore Form" (nicknamed thus because the office is in Baltimore). Supplied by Office of International Programs, PO Box 17741, Baltimore MD 21235-7741; tel: 410-597-4301, fax: 410-966-1861 (only for requesting certificates of coverage). Forms are country-specific. Country-specific forms have individual names, such as "USA/IT 4" (the one for Italy, for example). The form, a Certificate of Coverage, serves as proof of exemption from social security taxes for employed and self-employed U.S. citizens who will be working in the specific country for less than 60 days. These forms are generic - the name and personal information lines are left blank. There seems to be a facility to request certificates online.
NB. The regulations seem to change often. Promoters are sometimes confused as to which form is actually needed - the 6166 or the Baltimore. The best policy is to ask the promoter to send a copy of the form they are requesting.
FORMS PROVIDED BY UK GOVT.
FORM E-101 - Supplied by HM Revenue & Customs, Centre for Non-Residents, Employer Team, Room BP1301, Benton Park View, Newcastle Upon Tyne NE98 1ZZ; tel: 0191-22-55430; fax: 0191-22-53708. The form provides exemption from paying insurance contributions in other EU states. Apply for an E-101 using Form CA8451 for self-employed persons who must be paying Class 2 contributions to qualify. There is another application form for employed persons. The forms are free. The forms are venue specific.
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Requirements From Specific States
AUSTRIA
As of 10/4/8.
Double taxation withholding or Artist Tax (unclear on this point): US Resident musicians can sign a Declaration affirming that within a specific tax year that the artist, or band, will earn less than $20,000 in Austria, and that the fee in question is less than $10,000. Tax is then avoided.
Sample Text: ARTIST NAME herewith confirms that my gross income (including all allowances) in Austria within the fiscal year YEAR is less than USD 20.000.— and in regard to the regulation of the Austrian Ministry of Finance (DBA-Entlastungsverordnung § 2.2) the total income received at VENUE NAME is less than EUR 10.000.--. Furthermore I will confirm by separate form (ZS-QU1) that I am a resident of the USA in the year YEAR and provide PROMOTER with a copy of my passport. No charge of value added tax – transfer of tax due (Reverse Charge § 19 Abs. 1 UstG)
BELGIUM
As of 2/21/8.
Artist Tax. US Resident musicians can sign a Declaration supplied by the Ministry of Finance that avoids double taxation withholding. The artist declares that in a specific tax year that the artist, or band, will earn less than $20,000 in Belgium. Advice from a Belgian agent: "With bigger fees or when it's likely that musicians exceed the dollar limit I would recommend to deduct it right away but since it's not so easy/fast to get paid taxes back later on, it's best to decide the handling show by show." UK resident musicians are subject to withholding.
DENMARK
As of 5/21/7.
UK RESIDENTS: No form required.
US CITIZENS: No form required.
No Artist Tax - a civilized country.
FRANCE
As of 5/21/7.
Who the hell knows? Good luck. There even seems to be a requirement mooted for all foreign musicians to submit to a medical check on entry to the country.
GERMANY
As of 5/21/7.
UK RESIDENTS: No form required.
US CITIZENS: No form required.
A
Foreigner Tax is levied on bands (and only bands) that depends on the number of foreign musicians on stage. The UK Inland Revenue seems to consider this to be an illegal tax so will not give a tax credit for it.
Here is an outline of the situation, courtesy of
Konzertagentur Berthold Seliger:
German Artist Tax consists of two things: Foreigner Tax and Solidarity Tax.
Graduated Tax Levels
Bands pay a smaller portion of foreigner taxes, if any, if they receive small fees. The rule goes like this:
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Fees between 0 and EUR 250 are tax free.
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Fees between EUR 250 and EUR 500 are taxed at 10% plus solidarity tax, i.e. total of 10.55%.
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Fees between EUR 500 and EUR 1.000 are taxed at 15% plus solidarity tax, i.e. total of 15.83%.
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Fees over EUR 1.000 are taxed at 20% plus solidarity tax, i.e. total of 21.10%.
This rule applies PER SHOW and PER PERSON, as long as each band member confirms by signature that he/she receives an equal portion of the fee.
However, German tax authorities charge foreigner taxes on hotels as well as on catering and further costs, and they charge a VAT amount of 19% on all this before the total per person is counted.
For example: A five piece band receives EUR 1.000 fee, i.e. EUR 200 per person. Now, we have to add hotel costs (if they are not in a nightliner coach...), let's say EUR 50. Then we have to add catering costs, let's say EUR 30.- It's 280 already. Then we'll have to count 19% on this, makes it a total of 333.20, so the amount will be taxed with 10.55%.
US Taxpayers
US taxpayers, who can provide a Form 6166 for the tax year, may apply for a refund of withholding tax at the end of the year, if they have earned less than US$ 20.000 in Germany in the current tax year. This rule applies PER PERSON, and it has to include the whole income. NB. Only the person who has signed that he/she has received amount X may apply for a refund of this amount. So if the taxes have been split in 5 portions per show, because of 5 band members, each band member has to apply himself/herself. There are forms for this application (German and English versions).
Expenses
If your real expenses are higher than 40% of German income, you may apply for lower taxes. But you have to send original receipts for all your expenses, and loads and loads of paperwork of course. This is more suitable for big bands travelling with big productions.
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ITALY
As of 5/21/7.
UK RESIDENTS: Requires E-101.
US CITIZENS: Requires "Baltimore" Form USA/IT 4.
30% Artists Tax. Some promoters ask you to generate invoices that show travel and production expenses to mitigate the tax liability.
NETHERLANDS
As of 5/21/7.
UK RESIDENTS: Photocopy of passport.
US CITIZENS: Photocopy of passport.
Artists Tax. Holland used to have an Artists Tax which required submitting expenses and production costs in order to mitigate liability. Recently they simplified and liberalized the laws after they discovered it cost more to collect the tax than the tax generated. The Dutch, though they must shoulder the blame for initiating this cycle of violence, at least, and at last, came to their senses. Very pragmatic. Very Dutch. They re-enter the ever-dwindling camp of Civilized Nations.
PORTUGAL: WARNING! Portugal is a Podunk Nation - avoid.
As of 9/21/9.
OUR EXPERIENCE: No matter what you do and no matter what they tell you, you WILL NOT get a refund. Here is the letter of rejection from the promoter 20 months later. Note, we did EVERYTHING required. Portugal now must be moved into the List Of Uncivilized Podunk Nations.
To avoid double taxation, XXXXX usually:
a) hires artists through artistic agents, who have an independent management from the artist himself;
b)uses its pre-written contract that guarantees the wanted application of the Convention to Avoid Double Taxation;
c)Ępays artistic fees and booking fees to the same entity, and this being the artistic agent;
d) only makes payments when all the paperwork is completed, as to have the possibility of correcting it when needed (thus ensuring no double taxation).
DOUBLE TAXATION: Advice from a Portuguese promoter: Portugal implements international double taxation conventions in a form that could, in some respects, be described as erratic and certainly unusual when compared to other nations. The prevailing guidance from legal and financial colleagues is that, provided the contracted party is a bona fide agent for the services of the artist, it is permissible to exploit a clause in Portuguese legislation to avoid deducting tax at source. (For the avoidance of any doubt, such a loophole definitely does not exist when the contracted party is the artist him/herself, nor another individual, nor when it is another organisation such as a band.) This application or interpretation of the Portuguese rules works for agents in most territories in which agents are commonly based, including the most part of the European Union countries, and the only extra paperwork required is for the agent to complete and return to the promoter is a 'CRF' (also known more formally as a 'Modelo 12-RFI') form which proves to the promoter and the Portuguese authorities that the agency concerned pays its taxes in its country. It is also important that the invoice for the fee payment comes from the agent, not the artist (irrespective of whether all or part of any payment was actually made to the artist or some other party, rather than the agent's client account). The CRF must be filled out in triplicate and be stamped by the agent's tax authority.
UK RESIDENTS: Send the form to your local tax office. Processing time 4-6 weeks.
NB. - The CRF Form has not been used successfully by anyone we know. Be aware as well that the withholding is 20% to a band and whatever the contract says be prepared to not avoid withholding at the highest rate. It is screwed up. Best just to assume it's lost money. The more official the organization paying you the less likely it is to avoid.
SERBIA
As of 5/21/7.
UK RESIDENTS: E101s for UK tax-payers not applicable - not part of EU and no tax treaty to apply.
SWEDEN
As of 5/21/7.
UK RESIDENTS: E-101 not required.
US CITIZENS: Show passport.
15% Artists Tax - Americans are allowed to earn up to 6000 SKR a year before they are taxed but it is levied on UK residents irregardless.
SWITZERLAND
As of 5/21/7.
UK RESIDENTS: No form required.
US CITIZENS: No form required.
No Artist Tax.
