Withholding Tax Clearance Problems and Delays

We are finding that Tax Clearances are becoming more difficult to obtain and also to obtain in an orderly time-frame.

More artists are touring regularly in order to make up for the earnings shortfall in record sales (Forgive me, any millennials reading this and wondering what record sales are!). In addition, artists are having to become much more creative in generating new revenue streams, often around their touring activity. However, tour cash flow is a far greater issue for touring artists due to the lack of alternative revenue streams available to fund the tours.

However, this increased activity also means that the various Tax Authorities worldwide are having to deal with more activity and new revenue streams but with the same and in some cases fewer staff. The significant delays are causing funding problems for artists. A tax credit is no substitute for cash.

We have noticed delays of a number of months in –

• • Belgium
  • Germany
  • United Kingdom

In addition, in Germany the local offices are no longer dealing with tax submissions from Artist representatives but this has now been transferred back to the German Federal Tax Office. This has resulted in both delays and a reversion to the previous intransigence in terms of accepting costs incurred by independent production companies with the result that the artists earnings are taxed on gross before any deductions.

The Tax Authorities can only process so much with the personnel and time available but with increased activity this is causing problems for all sides.

Philip