The government’s recent decision to reserve the flat-rate deduction of expenses under the tax regime applicable to income from copyright and related rights solely for holders of an arts work certificate (or rather, holders of an ordinary arts work certificate or an ‘arts work plus’ certificate) will have significant implications and destabilising effects. This is true not only for those directly affected, such as collecting societies and other debtors of these rights, but also for the functioning of the Arts Work Commission, the tax authorities and, by extension, the entire ecosystem of the Belgian arts and culture sector.

These foreseeable consequences threaten, first and foremost, to fundamentally disrupt and destabilise the reform of the socio-legal framework for artistic work, which has just been initiated with the introduction of the arts work scheme. This would be accompanied by legal uncertainty and increased administrative burdens for many of the parties concerned, with foreseeable knock-on effects in other areas. We set out the specific legal and other consequences in more detail below.

1) The requirement to be in possession of an arts work certificate in order to be able to claim the flat-rate tax for income from rights is, first and foremost, a violation of a fundamental principle that is firmly established in international copyright law (in the broad sense, therefore also for related rights). Namely, the protection offered by these rights (and therefore also the remuneration for the granting of these rights) cannot be subject to formalities. Protection arises automatically from the creation of the work or performance and cannot be made subject to an obligation to register, deposit, include certain references or marks on the work or recording of the performance, or obtain a specific document issued by a public authority. In this regard, we refer first and foremost to Article 5, paragraph 2, of the Berne Convention: “The enjoyment and exercise of these rights shall not be subject to any formalities; such enjoyment and exercise shall be independent of the existence of protection in the country of origin of the work. “[1]. The same principle is also enshrined in other international treaties, in European Union directives and the case law of the Court of Justice of the European Union, as well as in the national legislation of many countries other than EU Member States.

It also follows that no obstacle may be placed in the way of the payment of royalties by a collective management organisation to its members. This follows in particular from Belgian copyright legislation (Book XI of the Economic Law Code[2]), European Directive 2014/26/EU on the collective management of copyright and related rights[3], a multitude of European and national court decisions in various Member States, and national and international case law. The amendment to the tax legislation may therefore first be challenged on this basis before the courts or in the context of relations between taxpayers and the tax authorities.

2) For operators in the cultural industries (publishers, producers, distributors, etc.) and for collecting societies in our country, this measure will result in a significant additional burden in terms of administrative tasks and increasing operational costs. They will have to adapt and adjust their current procedures for calculating and withholding withholding tax, distinguishing (and ensuring) who holds an ordinary arts work certificate or an ‘arts work plus’ certificate, and who does not. For all these parties, this will inevitably lead to an increase in overheads and delays in payments.

For collecting societies, copyright legislation has also stipulated since 2014 that their operating costs may not, in principle, exceed 15% of their total revenue.[4] This has been an operational challenge for the sector, but in recent years most collective management players seem to have succeeded in meeting this threshold. [5] The proposed measure now risks undoing this positive development. It is also questionable whether the distinctive procedures that collecting societies will have to put in place as a result of this measure will not conflict with their legal obligation to manage rights on the basis of non-discriminatory criteria.

3) Linking the application of the flat-rate tax under the tax regime applicable to income from copyright and related rights to the condition of holding an ordinary arts work certificate or an “arts work plus” certificate will automatically lead to a flood of applications to the Arts Work Commission. It can already be assumed that these new applicants will generally not be the candidates for whom the reform of the status of artists (which led to the new regulations on working in the arts) was originally intended, but rather self-employed persons and/or applicants who will not necessarily meet the conditions for obtaining a certificate of working in the arts (for the reasons listed in point 4 below or for other reasons) . This will result in an unprecedented additional workload for the Working in the Arts department and the members of the commission themselves, many of whom are already overburdened and some of whom are already doing more than they were appointed to do.

To give a rough idea of the figures in light of the above: today, several thousand people[6] have a certificate of work in the arts (including arts workers who are not artists but who have artistic-technical or artistic support profiles)[7]. The number of members affiliated with Belgian collecting societies for authors and holders of related rights who are eligible for income from these rights can be estimated at around 70,000 to 80,000. We are therefore talking here about a potential influx of tens of thousands of additional applications…

4) The arts work certificate, in its three variants – simple, “plus” or “starter” – is reserved for artists working in eight specific areas of the arts[8], whose activities must also meet specific requirements. Limiting the possibility of applying the flat rate to holders of the first two variants of the artist certificate would exclude a large number of people who hold copyright and related rights outside these eight fields: for example, journalists, authors and performers working in advertising, graphic artists and designers, scientific and educational authors, authors and performers who receive their income from rights through their own company, etc. In addition, novice artists (those who can normally claim ‘starter’ arts work certification) would also be excluded from the possibility of applying the flat rate.

It is therefore likely that this blatant discrimination will prompt rights holders to challenge the measure in court. There is a solid legal basis for this. Indeed, the status of holder of copyright or related rights is in no way linked to social status, employment (or unemployment), beginner status or degree of professionalism. There are therefore rights holders who work as employees, rights holders who are entitled to unemployment benefits, retired rights holders, self-employed rights holders, student rights holders, minor rights holders, etc. And what about the heirs of authors and performers, for whom the link between the application of the flat rate and the requirement to hold a certificate of work in the arts is inconceivable? The absurdity of such a measure, implemented in the field of social law but for tax purposes, is obvious.

5) Even though, in our country, few authors or performers can make a living from their creative work or artistic performances, and even though income from copyright and related rights represents only a limited part of the total income of a large proportion of rights holders, in the vast majority of cases it makes the difference between being able to survive as an artist or not. Earning income from copyright and related rights involves, in addition to a number of expenses, a great deal of unpaid time: for negotiating and drafting contracts, for the services of an accountant, for the advice and assistance of a lawyer or specialist solicitor, for membership of and registration of works and recordings with collecting societies, etc. The actual work itself (making a film, creating an illustration, writing and recording the soundtrack, etc.) involves other expenses and unpaid working hours, separate from those incurred and carried out to obtain income from rights: in this case, for recording equipment, illustration equipment, studio rental, training, specialist literature, etc.

To what extent and for which tax years all these costs will ultimately prove to be proportional to the income derived from the exploitation of the rights holder’s works is generally impossible to estimate in advance and impossible to determine a posteriori. This is the ratio legis of the flat-rate deduction provided for by law… Insofar as the government measure under consideration would encourage rights holders to declare their actual expenses in the future, this would entail additional costs and administrative tasks for them, as well as the need to call on specialised accountants and tax specialists who are familiar with the particularities of the arts sector (and for whom the term ‘endangered professions’ can be used without hesitation…). It is already clear that this change will significantly increase the risk of disputes with the tax authorities over whether or not to accept these actual professional expenses. It will also increase the complexity of artists’ tax returns and, in general, legal uncertainty.

The inclusion of actual costs in the calculation of tax on income from copyright and related rights will inevitably pose problems. This is because withholding tax on this income is levied on the gross amounts of this income, i.e. before the actual costs are known. On the basis of the personal income tax return, the withholding tax levied will then have to be credited a posteriori to the final net income (after deduction of actual costs). The taxpayer will then generally have to be reimbursed for the excess withholding tax.

6) For those who receive income from rights and receive ordinary unemployment benefit[9] but cannot provide proof of being an ordinary arts worker, the measure results in an additional loss. The non-applicability of the flat-rate deduction of expenses will initially result – as for all beneficiaries of income from copyright and/or related rights who do not hold the required arts worker certificate – in a considerable increase in tax on this income. [10] In addition, the measure will have a further impact on the possibility of combining this income with the unemployment benefits of the persons concerned. Currently, they are allowed to receive up to €11,060.40 net taxable income per year from rights, without this income affecting their benefits. However, as a result of the proposed measure, there would no longer be any distinction between gross and net income to be taken into account. In practical terms, this means that these beneficiaries will only be able to receive €11,060.40 gross per year in income from rights without their benefits being reduced, instead of €22,120.80 gross previously.

[1] https://www.ejustice.just.fgov.be/cgi_loi/article.pl?language=fr&lg_txt=f&type=&sort=&numac_search=&cn_search=1971072430&caller=SUM&&view_numac=1971072430n

[2] https://www.ejustice.just.fgov.be/cgi_loi/article.pl?language=fr&lg_txt=f&type=&sort=&numac_search=&cn_search=2013022819&caller=SUM&&view_numac=2013022819n, see in particular Articles XI.248, XI.249, XI.261-XI.267 and XI.271-XI.273/16.

[3] https://eur-lex.europa.eu/legal-content/FR/TXT/PDF/?uri=CELEX:32014L0026 (Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the digital environment), see in particular Articles 4, 5, 12 and 13, as well as various introductory recitals of the Directive concerning the regular, rigorous and timely payment of royalties collected by collective management organisations.

[4] https://www.ejustice.just.fgov.be/cgi_loi/article.pl?language=fr&lg_txt=f&type=&sort=&numac_search=&cn_search=2013022819&caller=SUM&&view_numac=2013022819n, Article XI.256.

[5] See Service de contrôle des sociétés de gestion de droits d’auteur et de droits voisins – Rapport annuel 2024, pp. 21-22 (https://economie.fgov.be/sites/default/files/Files/Publications/files/Rapport-annuel-2024-Service-de-controle-des-societes-de-gestion-des-droits-auteur-F.pdf).

[6] As of 31 December 2024: 2,861 new arrivals who already had artist status prior to the reform) and 1,874 who were awarded the arts work certificate in 2024 by the Arts Work Commission – source: 2024 Annual Report of the Arts Work Commission (https://www.workinginthearts.be/ file/cc73d96153bbd5448a56f19d925d05b1379c7f21/f6cfa1820599c405ba026609287afa52e8e6b50a/rapport-annuel-wita-fr.pdf).

[7] In 2024, Working in the Arts received a total of 3,729 applications for arts work certificates, of which 661 were withdrawn. Of the 3,068 applications accepted for processing, 2,317 (= 75.5% of accepted applications) were processed during the same year, resulting in the actual granting of 1,874 arts work certificates – source: 2024 Annual Report of the Arts Work Commission (Ibid.).

[8] Audiovisual arts, visual arts, music, literature, performing arts, theatre, choreography and comic books.

[9] And therefore not: holders of an arts work certificate ‘plus’ who receive an allowance for works of art…

[10] Up to €20,590.00, this is a doubling of the tax; for amounts between €20,590.00 and €41,180, it increases by 25%.