Proposition 52K1188

Projet de loi modifiant le Code des impôts sur les revenus 1992 et organisant une fiscalité forfaitaire des droits d'auteur et des droits voisins.

General information ¶

Submitted by

The Senate

Submission date

July 26, 2007

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

copyright tax relief direct tax tax on income

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld N-VA MR FN VB

Abstained from voting

LDD

Contact form ¶

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Discussion ¶

June 19, 2008 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, colleagues, the bill under discussion is the result of a parliamentary initiative from the Senate. The proposal, submitted by Mr Philippe Monfils, aims to review and simplify the tax regime for the income derived from the assignment or concession of copyright and related rights. With the provisions of the draft law it is intended to group all income in a single qualification and thus to consider them as movable income, which are subject to an exemptive movable advance tax of 15%, provided that such income does not exceed 37,500 euros, being 50,000 euros indexed for the financial year 2009. For higher amounts, the qualification changes and income is subject to the tax regime of professional income.

The question raised in the committee was why there should be a specific status for that category of people. In response to that question it is stated that the artistic professions are exposed to specific risks and dependencies with which the other professions are not confronted: the risk of creativity, the risk associated with the irregular nature of the paid activity, alternating with necessary but unpaid creative periods, the risk associated with the prototype characteristic of artistic products and performances, the risk associated with the alternations of success and fashion. These special factors distinguish them from other closely related occupational categories such as scientists and industrial inventors, who work with objective elements such as science rather than subjective elements from the imaginary world. These latter also work in a more structured professional framework, we think of access to the profession, academic or industrial research.

Revenue from artistic activities is naturally fluctuating and modest and is only raised after long unpaid periods of creation, in which the artist must invest, for example preparing an exhibition, writing a novel over several years, composing and recording music and exploiting during the years following. Income is then fully subject to the progressivity of taxation, while referring to previous periods of activity. The question of why we had to do something for this category in the Chamber is clearly answered. This was unanimously approved by the committee.

Several members took the floor. Among other things, Mr Van der Maelen asked a question about certain comments made in the journal Fiscolog. Mr. Brotcorne referred to the letter of the Société des auteurs et compositeurs dramatiques.

Finally, the essential question was asked what will be the consequences of the legislation on tax receipts. Has there been, as is the case in our Committee on Budget and Finance, an audit of the Court of Auditors? The Court of Auditors has not been able to calculate what the outcome of the law as such will be, but it was referred to an estimate of the Administration of Fiscal Affairs. It stated that in an unchanged situation the budgetary cost of the law is estimated at 2.9 million euros. Furthermore, that service believed that in reality the costs would more than likely be nonexistent, because we must take into account all kinds of derivative consequences and changes in behavior. For example, the Belgian beneficiaries of the new measures will remain in Belgium, while they now have the possibility to settle in another country or to be taxed. Artists will also return to Belgium, who have now emigrated to countries with other, more favourable systems for tax reasons. In the current situation, it is taken into account that the attack will be collected for 100 percent, since the 15 percent will be held at the source. Therefore, it is more certain what the revenue for the state is in this area.

On the basis of all these elements, the service concludes that the proposal will have a positive effect on our state finances, because in this way we would get more artists in Belgium.

However, the draft law approved in the Senate and transmitted to us will have to be returned to the Senate, as an amendment was submitted by Mr. Brotcorne, Mr. de Donnea and myself. The amendment aims to restore in Article 261, paragraph 1, of the Income Tax Code the fourth paragraph, repealed by the Law of 25 April 2006. Thus, it is clarified that the debtors of the income referred to in Article 17, § 1, 5° of the BH 1992 – national residents, domestic companies, associations, institutions, institutions and bodies, as well as legal persons subject to corporate tax and non-resident taxable persons – are liable to mobile advance tax, regardless of their own tax system.

As regards the management companies of right, the King will be proposed in the Royal Decree implementing the Income Tax Code 1992 to provide for an exemption from the mobile tax, in order to avoid double taxation, so that no taxes are due by the management company and the author, and to confirm the fiduciary intervention of the management company in accordance with its mandate, as provided by the law of 30 June 1994.

All articles, as well as the amendment, were unanimously approved and will therefore again be the subject of discussion in the Senate.

Mr. Speaker, my colleagues, the PS Group can only be pleased to see finally a suitable tax status for copyright and related rights.

The text we will vote on this afternoon is the result of long work and long compromise. As the PS pointed out in the various bills it submitted on the issue, the artists were living in the most complete legal uncertainty due to the multiplicity of possible qualifications of copyright income.

On a more philosophical level, adopting a tax status for artists also means recognizing the particular nature of artistic activities and the income resulting from them.

The PS Group is also pleased that the new artists tax status provides for a progressive taxation of copyright and related rights revenues. The draft law on this status stipulates that revenues from copyright and related rights will now be taxed at a rate of 15%.

The progressivity mechanism, proposed by the PS, also provides that the artist will be able to deduct flat-rate costs at a rate of 50% for the first tranche of his income of 10,000 euros and of 25% for the tranche from 10,000 euros to 20.000 euros. Beyond these 20,000 euros, no fixed fee will be admitted.

This progressive mechanism is in line with reality in so far as it takes into account the copyright economy as can be seen by analyzing the figures of copyright management companies. Between 2003 and 2006, 97 to 98% of authors received less than 20,000 euros and 93% received less than 10,000 euros.

On behalf of my group, Mr. Secretary of State, I would like to emphasize, however, that we will be very attentive to the reality of the implementation of this future law. We expressly ask you – and, of course, first of all, the Minister of Finance – to take very quickly all necessary arrangements to compel those who will pay the furniture prepaid to transmit this information appropriately to the tax administration because, in terms of copyright too, all possibilities of abuse must be avoided.

This is the execution. Today is the vote. I think we can be unanimously happy to finally reach this compromise!

For this speech, I wanted to come to the tribune because Ecolo-Groen! He has been waiting for this achievement for so long. From 1999 to 2003, we were finally able to shape the social status of the artist. This was Titan’s work and there are still corrections to be made: some devices will need to be evaluated and modified in relation to the actual effects. The goal was to guarantee social security to all artists, taking into account the random nature of their income and the long periods during which they may be deprived of income until a sum comes to them that will have to be invested in the next work.

We also wanted to work in parallel on the tax status of copyright. Without this provision, some authors find themselves at unemployment between the writing of the previous book and the writing of the next. From the moment when one is unemployed and copyrights are not considered as movable rights, as will now be the case, they could not cumulate copyright income with their unemployment benefits, while this income is linked to the exploitation of a work they have previously produced and whose profits return to them once they are unemployed.

The main part of this arrangement lies in the protection of artists whose income will have the same status regardless of the tax administration to which they will address. In addition, this income can be cumulated with the necessary interruption allowances when you are an artist.

I am pleased that the Minister of Finance has agreed to work on this provision, especially since in 1999 and 2003 he did not really agree with the proposal of Mr. and Monfils. I remember that then Minister of Social Affairs, Ms. Onkelinx, did not really agree either to look at the tax status of copyright.

I am glad today that there is a consensus to ⁇ this.

As for progressivity, I think it is interesting from an ethical point of view. On the other hand, from a financial point of view, I do not know if it will bring something because, unfortunately, the vast majority of Belgian artists (90%) have copyright revenues below 10,000 euros. But, I repeat, it is interesting to say that these income can be considered as moving income, with a flat-rate fee rate for tranches below €50,000 (if I round) in 2009 and that beyond, they will be considered as professional income.

There is still a lot of work to be done, but the recognition of the tax status of copyright will make progress. These incomes come curiously, a large sum, then nothing, then investments to be made. It is known that certain professional categories can stretch the tax, smooth it, but for such random activities, this requires a common approach of the representatives of the profession with the tax administration. This was not the case when the artists could have done it. But I think one of the reasons for this situation was the absence of tax status for copyright. This placed artists in blurred situations regarding the nature of their income.

Now, I hope that we will be able to continue the work of improving the tax treatment of income other than copyright.

Our group will support this proposal by welcoming the ongoing struggle that Philippe Monfils has led on this subject. We did not submit a proposal because this man was leading the fight. He must be greeted today.

Mr. Speaker, Dear colleagues, the draft law amending the 1992 WIB and establishing a flat-rate tax regime on copyright and related rights, which was transmitted to us by the Senate and unanimously adopted there, seeks to address the disadvantages of the current system of taxation on copyright and related rights.

We are pleased that there is a tax system for copyright revenues that is separate from the other revenues of an author. For the creation of this new tax system there was and there is a clear necessity. First of all, artists see their copyright revenue fluctuate greatly. In addition, the tax on copyright is also a complex matter. They were housed in six different categories that, as mentioned, also take into account other income that the author can enjoy. Therefore the need for a special tax system that we will approve here today.

Today, the qualification of income is crucial for tax calculation. Depending on the qualification of income, this results in a significant difference in tax pressure. Professional income is taxed at the progressive rate. The qualification as various income gives a rate of 33%. Moving income is taxed at 15%. The subjecting of these professional income to the progressive rate further reinforces the difference in tax pressure. Indeed, revenues from artistic activities are naturally fluctuating and modest and are only raised after long unpaid periods of creation and creation, in which the artist must invest.

The subjecting of these incomes to the progressive rates is therefore replaced by a flat tax of 15%. In order to avoid the need for the creativity of the artists to deviate from the administrative nature of the proof of professional costs, a special cost allowance is also provided. In this way we get a tax system that shows the appreciation of the government for the work of those who with their creative spirit make our living world richer.

Colleagues, this bill is in favor of all those who are rich in imagination in our society. To promote the literature and the fine arts: sharpen your pen, music, be creative. This bill offers interesting tax opportunities.

Mr. Speaker, my group is pleased that this text will be completed in a few minutes. At least he has the merit of giving our artists this tax status. There was legal uncertainty as there were different qualification options and it wasn’t always easy for them to get there.

The technique that has been used, the pre-release furniture pre-count, remains quite reasonable under the conditions in which it is defined in our text.

It has been recalled, this tax status comes after the social status of the artist but I think we will still have to imagine a third part. I would like to call for a discussion within our Parliament on other elements that will allow us to participate in a creative spirit, very necessary for our artists. I want to talk about the possibility of introducing in our law the notion of mecenate, which is important to enable our artists to live tomorrow.

Therefore, I wish for a real discussion on these topics in the coming months.