Copyright income is not simply added to professional income. This is because since 1 January 2008, copyrights have been considered movable income. The good news? The tax rate for this is only 15% instead of the 25% to 50% you normally pay as personal income tax.
Before you receive your royalties, Sabam deducts a withholding tax of 15%. This deduction is made without any limitation of the amount.
The amount withheld is of course transferred to the tax authorities.
You will receive a tax sheet with all the amounts you need to fill in on your tax return. After all, even if Sabam withholds the amount and we pass it on, you are still obliged to declare this income in your personal income tax.
On your sheet you will find the gross amount from copyright, the actual costs applied by Sabam and the withholding tax deducted by Sabam. The actual costs are the commissions charged by Sabam.
You may deduct flat-rate or actual costs from your royalties in your personal income tax return. Depending on the amount of your rights, it may be better to choose actual costs. Sabam provides a calculation tool on the "MySabam" website which can be used to carry out this simulation.
The following lump-sum charges apply (indexed revenues 2021, assessment year 2022):
| Cost flat rate | 50% | 25% |
|---|---|---|
| 2021 | € 0 - € 16,680 | € 16,680 - € 33,360 |
Example:
If you receive a gross amount of €30,000 in royalties in 2021, you will pay
(€ 30,000 - € 11,670 flat rate) X 15% = € 2,749.5 tax (9.16%).
But on a gross amount of €10,000, you pay only
(€ 10,000 - € 5,000) X 15% = € 750 tax (7.5%).
However, this only applies as long as they do not exceed € 62,550 gross (indexed income 2021).
Do the fees exceed € 62,550 per year (before deduction of costs)? Then the received rights above € 62,550 can be reclassified as professional income and taxed at 30% withholding tax.
Note: these can be reclassified as professional income if they are professional income and they will be taxed at the progressive personal income tax rate.
When should I declare my copyright income?
If you are a taxpayer and subject to personal income tax, you have been obliged to declare all movable income (including your copyrights) since your 2012 income (assessment year 2013). Even if this was subject to withholding tax. So there will be a slight tax increase through the possible municipal surcharges.
Practical rules for tax return year 2022 (income 2021)
Revenue <€ 62,550
Tax return:
Part 1 - Box VII 'Income from capital and movable property’
D. Revenues from the assignment or concession of copyrights, neighbouring rights and statutory and compulsory licences
| Codes | Codes | |
|---|---|---|
| 1. Income (gross) | 1117-47 | 2117-17 |
| 2. Flat-rate costs | 1118-46 | 2118-16 |
| 3. Withholding tax | 1119-45 | 2119-15 |
Sabam issues a specific tax sheet for this purpose, no. 281.45.
Revenue > € 62,550
For tax purposes, a professional activity exists when:
- you are regularly active as an author
- those activities generate royalties
- those activities are interrelated
Once the 2021 indexed income has been deducted, the part exceeding € 62,550 gross must be declared as professional income if it is indeed a professional activity.
Frequently asked questions
Does the allowance I receive from the Sabam social fund fall under the same advantageous tax regime?
Yes, the same rules apply to the allowance from the Sabam social fund.
You will also find these amounts on the tax sheet that we will send you so that you can easily fill them in with your personal tax.
I am the heir of an author. Are the royalties that Sabam pays me also taxable?
Sabam always deducts a withholding tax on the royalties it pays to natural persons. So also to heirs. Whether these copyrights are then taxable depends on the personal situation of the author and the heir.
I am based abroad and pay my taxes abroad. How do I avoid double taxation?
As an author living abroad and paying tax abroad, you can avoid double taxation.
There are many countries with which Belgium has concluded a "double taxation" agreement. This means that if you are established abroad and pay tax there, you are not subject to the 15% withholding tax.
However, it is necessary for your local tax office to fill in a form (276R) and return it to us, otherwise we will deduct 30% withholding tax from your rights.
If you have not sent us this document or have sent it too late, it is still possible to get a refund of the withheld taxes.
To do this, please go to the following address:
SME Centre for Specific Matters - Team 6
Kruidtuinlaan 50 bus 3429
B-1000 Brussels
send the following documents:
- A credit message indicating the amount of rights collected (gross amount, percentage of withholding tax, date and deducted withholding tax);
- A bank statement for the beneficiary of the rights showing the net amount of the rights collected;
- A copy of the withholding tax declaration(s);
- A certificate of residence stating:
- The status of the revenue beneficiary;
- The tax identification number;
- This form must refer to the income year to which the application relates.
I received an advance in year X. Is it taxable during the year of receipt (year X) or during the year it is redeemed (year X+1)?
Advance payments of royalties are taxed at the time of payment. So if you received an advance payment in 2021, it will also be taxed in 2021 (assessment year 2022).
What is the procedure to be followed by revenue collectors like Sabam?
Debtors with respect to copyrights and neighbouring rights such as Sabam must prepare a 273S withholding tax return and submit it to the government. Any income (on which withholding tax has been deducted) must be detailed in the return, indicating the gross income, the deducted expenses and the withholding tax paid.
Can I convert my fees or remunerations as a salaried employee into royalties?
No, in our opinion, you should only ask whether the income considered is income from copyrights or neighbouring rights within the meaning of the law of 30 June 1994. The notice published in the Belgian Official Gazette on 9 December 2008 also clearly states that the reclassification of professional income (for remuneration of services) as copyright is prohibited. So avoid "forced re-qualifications".
The Law of 16 July 2008 is not intended to convert income constituting remuneration for wage or salary earners or income from liberal professions, offices or posts into royalties.
Are there any exemptions to this tax scheme?
There is no exemption from withholding tax for copyrights. However, there are cases of withholding tax waivers:
- domestic companies;
- recognised rights management companies (Article 65 et seq. of the Act of 30 June 1994 on copyright and neighbouring rights)
- international or supranational institutions (Article 105, 2°, c)
- companies of a Member State referred to in Article 105, 6°, a., other than domestic companies, provided that the debtor and the entitled party are associated companies within the meaning of Article 105, 6°, b.
This avoids double taxation (on the one hand on the royalties received by the management company and on the other hand on the royalties paid to the author by the management company). It also confirms the fiduciary action of the management company, in accordance with its mission as stipulated in the aforementioned law of 30 June 1994. With regard to rights management companies in particular, the Act of 30 June 1994 introduces a specific statute for management companies (art. 65 and following).
In short, the management task of these management companies consists only of collecting and distributing rights. They are in no way acquirers of those rights.
I have received a prize from Sabam. I assume I have a tax exemption?
In principle, you have to pay taxes on prizes that you have received from Sabam. However, the tax authorities may want to tax those prizes as professional income if you obtained them in the course of your "professional activity".
Only awards (or subsidies) you have received from governments or public institutions can be taxed as miscellaneous income at the separate rate of 16.5%.
Other prizes and subsidies are either non-taxable income if they are truly magnanimous in nature, or income from a professional or occasional activity (as the case may be) if they are to be considered the result of that activity.
Do I have to contribute to the social status of the self-employed for the royalties I receive?
Journalists, press correspondents and persons enjoying copyright are not subject to the social status of the self-employed if they already enjoy, in whatever capacity, a social status at least equivalent to that of the self-employed.
In other words, those who are subject to a social status at least equivalent to that of a self-employed person or those who are subject to the social status of an employee, worker or civil servant do not have to contribute to the social status of the self-employed for the royalties they receive.
I receive royalties from Sabam and deferred rights from the Sabam social fund. Do I risk losing the right to my pension and having to contribute to the self-employed status?
As a retired artist, you may receive unlimited royalties, provided that your work consists exclusively of creating works of art or scientific works and that this activity does not affect the labour market, you are not a trader and you inform the Federal Pension Office in advance using the appropriate form.
I receive unemployment benefit. Can I continue to receive my royalties without losing the right to my benefit?
The income from your artistic activity may lead to a lower benefit. This income includes the remuneration for a performance, income from the sale of works of art, copyrights and neighbouring rights, any taxable prizes you win and the income from a mandate in a company. Your income as a salaried employee is not taken into account. Therefore, this does not affect your benefit. Ditto for reimbursements that fall under the 'small fees scheme'.
Even if you are no longer active as an artist, but still receive income from a former activity (copyrights or royalties, for example), this is taken into account, unless you have definitively ceased that activity before the start of the (first) unemployment period or for at least two consecutive calendar years.
If your net taxable income per year, as described above, is less than €4,626.96, there is no impact on the amount of your benefit.
You can find more information on rva.be.
What is the VAT rate on copyrights?
The VAT Code considers the "transfer or licensing of copyrights" to be a service subject to a 6% rate (unless it is copyrights for IT programmes, which are subject to 21% VAT).
Only if you receive the income within the framework of a contract concluded by you for the publication of literary works or works of art are they exempt from VAT (art. 44 § 3, 3°, VAT Code).
I receive royalties from Sabam. But who owes the 6% VAT?
Sabam pays the VAT due on the collected royalties on behalf of the authors, composers and publishers it represents.
This releases you from the obligations imposed by or in implementation of the VAT Code, insofar as they relate to the transactions in which we are involved.