Music Authors Can Now Credit Teosto Royalties To Their Company
As from the beginning of October 2018, music authors can credit Teosto copyright royalties to their company so that Teosto royalties are taxed as the company’s business income. Thanks to the reform, music authors can work as entrepreneurs in the same way as operators in other fields.
The aim is to make the taxation of music authors equal with that of other entrepreneurs. Fixing the situation has been one of the goals of the current Board of Directors, and it is also part of the Board’s agenda.
“The reform is an important improvement for professional music authors, for whom Teosto copyright royalties are a significant part of their gross income. Until now, copyright royalties have been taxed mainly with a personal tax card. This has made long-term planning difficult, because the amount of royalties music authors are paid can vary considerably from year to year. The reform makes it easier for music authors to work as entrepreneurs, and enables long-term investment in order to expand and develop their professional activities”, explains Risto Salminen, Teosto’s CEO.
NEW TAX GUIDANCE PRESENTED TO MINISTER ORPO
A key aspect of the reform is a Tax Administration guide tailored for music authors, prepared collaboratively by Teosto, the Ministry of Finance and the Tax Administration. Teosto and Tax Administration representatives presented the guide to Finance Minister Petteri Orpo on Friday 28 September. The Minister sees the reform as an important way to promote entrepreneurship in the creative industries and to support the growth of the field.
“This reform supports entrepreneurship in the music industry and the growth of the creative industries. Music authors must have the same opportunity to do business through a company as entrepreneurs in other fields do”, says Minister Orpo.
REFORM EFFECTIVE AS FROM THE BEGINNING OF OCTOBER
Music authors can adopt the new operating model on 1 October, and the first Teosto royalties can be credited to a company in the December 2018 distribution.
IN A NUTSHELL – PAYING TEOSTO ROYALTIES TO A COMPANY
- The company model suits professional music authors for whom music is an important source of income.
- When you have a limited company, Teosto can pay personal copyright royalties to the company without tax withholding. Your company pays business income tax on the profit.
- The model is temporary, and requires that you temporarily transfer your copyright to the company.
- The model only concerns Teosto copyright royalties. Gramex, Kopiosto and foreign organisations, for example, will still distribute royalties to you if you are a direct customer.