Tax regime for income on royalties
On 30/07/2008 a tax regime for income generated from copyright and related rights was published in the Belgian law gazette. Individuals who receive income from the transfer (assignment or concession) of copyright and related rights, as well as legal and compulsory licenses provided for in the Copyright Act, will be taxed advantageously. The scheme is applied from January 1, 2008 (tax year 2009).
A new VAT system has been in force since 1993, which was the result of a harmonisation of the different systems in the European Union.
The VAT system is divided into two rates: a high rate of 21%, and a low rate of 6%. The low rate applies to most cultural objects (magazines, books, original works of art, collector’s objects) and services (tickets for productions, copyright).
Belgian legislation allows for many cultural exemptions (Article 44, §2, 6-9º, VAT Code) including:
- the hire (renting) of objects of a cultural nature, if these are made available on a non-profit basis;
- visits to museums, (natural) monuments, botanical gardens and zoos which are not exploited for profit;
- services by performing artists for organisers / companies provided by actors, leaders of orchestras, musicians and other artists; and
- the organisation of theatre, ballet or film productions, exhibitions, concerts or conferences by institutions recognised by the competent authorities, provided the income they gain from their activities is used exclusively to cover the costs incurred.
Such exemptions mean that there is no right to deduct tax in advance. The exemption for performing artists providing services to organisers / companies was also extended to unions of performing artists such as theatre companies. However, on 1 April 1998, this tax exemption was limited to individual performing artists (Letter no. 13 of the Minister of Finance, dated 19/11/1997). Since then performances which are not given by individuals would become subject to tax at 6%. The scope and application of this new interpretation remains very unclear and local tax inspectors are sometimes confused regarding the allocation of VAT status to theatre companies applying on the basis of Letter no 13. On 24 October 2006 the matter was discussed in the Chamber Commission of Finance. The debate led to the conclusion that: since new legislation is not to be expected in due course, companies can choose the best suitable system.
In some cross-border situations, the Belgium government is allowed to tax the income of non-residents who earn money by working in Belgium. However, this depends on co-operation agreements (double taxation laws) reached with the corresponding countries. For visiting artists, this system can lead to a deduction of company tax from the income which they earn for their performances in Belgium. This tax should be deducted by the Belgian organisers of the performances.
- The Law of 17 May 2004, regarding the change of Article 194b of 1992 on income tax, with regard to the tax shelter arrangement for the benefit of audiovisual production.
- Law of 17 May 2004, regarding the change of Article 194b of 1992 on income tax with regard to the tax shelter arrangement for the benefit of audiovisual production.
From January 2003 onwards, investors can enjoy a tax exemption for the amount they invest in the production of an audiovisual work in Belgium. From 2017 a tax shelter to support investment in the production of performances is in place.