Abstract
Copyright belongs to the creative industries as the legal result of the creative process. It can be sold or licensed and often creates income. By its nature, copyright is highly mobile and can easily cross borders, because it can be split off from normal business activities and held as a separate asset. States are interested in stimulating or attracting copyright, as they believe this has a positive effect on their economic activities or because they want to support their artists. States may implement a broad range of tax incentives, which may focus on low-earning creatives, major companies with high copyright income, or anything in between. Copyright income can easily be taxed twice in cross-border situations, a situation that states try to prevent through the use of tax treaties . This leads to opportunities for international structuring. Limits on this structuring are currently being set internationally with the Anti Base Erosion and Profit Shifting (BEPS ) program. However, this should not necessarily affect well-intended copyright tax incentive schemes.
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- 1.
Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (OJ L 157, 26.6.2003, p. 49), as amended (latest amendment: 13 May 2013, OJ 2013, L 141).
- 2.
http://www.oecd.org/ctp/beps-2015-final-reports.htm (Accessed 7 June 2016).
- 3.
Definition according to the European Patent Office (see www.epo.org and search for “glossary”).
- 4.
ECJ 12 June 2003, C-234/01 (Arnoud Gerritse).
- 5.
ECJ 3 October 2006, C-290/04 (FKP Scorpio Konzertproduktionen GmbH).
- 6.
ECJ 15 February 2007, C-345/04 (Centro Equestre da Lezíria Grande Lda).
- 7.
Section 195 TCA.
- 8.
Information comes from the website http://visualartists.ie, search for “artists tax exemption”.
- 9.
Quebec Taxation Act, Section 726.26.
- 10.
Article 17, §1(5) and Article 37(2) WIB92.
- 11.
The special tax exemption for creative income in Ireland was discussed separately, because of the special scope and conditions.
- 12.
Art. 12(1) OECD Model Tax Convention. A definition for the term “resident” has been given in Art. 4 of the OECD Model Tax Convention.
- 13.
Art. 12(3) OECD Model Tax Convention. This is under the condition that the copyright is effectively connected with the permanent establishment.
- 14.
Art. 12(2) OECD Model Tax Convention.
- 15.
Para. 4 of the Commentary on Art. 12 OECD Model Tax Convention.
- 16.
Para. 4.1 of the Commentary on Art. 12 OECD Model Tax Convention.
- 17.
Para. 4.2 of the Commentary on Art. 12 OECD Model Tax Convention. See also the report from the Committee on Fiscal Affairs entitled “Double Taxation Conventions and the Use of Conduit Companies”, OECD (1986).
- 18.
Para. 4.3 of the Commentary on Art. 12 OECD Model Tax Convention.
- 19.
Within the EU, this exemption application procedure is not against the freedom principles of the TFEU, because a state is allowed to certify that a treaty exemption really applies. This was decided in ECJ 3 October 2006, C-290/04 (FKP Scorpio Konzertproduktionen).
- 20.
See Article 23B OECD Model Tax Convention.
- 21.
Royalty and Interest Directive 2003/49/EU (as amended with Directives 2004/76/EU and 2006/96/EU).
- 22.
EU 20 December 2004, nr. L385/36.
- 23.
http://www.oecd.org/ctp/beps-2015-final-reports.htm (Accessed 7 June 2016).
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Molenaar, D. (2017). Tax Incentives for Copyright. In: Hemels, S., Goto, K. (eds) Tax Incentives for the Creative Industries. Creative Economy. Springer, Singapore. https://doi.org/10.1007/978-981-287-832-8_10
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