The artist arrangement

If you organize an event where artists perform, you can be regarded as a withholding agent. This may mean that you have to withhold and pay payroll tax and employee insurance premiums on the fee you pay to the artist. We call this arrangement the artist arrangement.

The artist

But what is an artist ? Artists are people who perform in front of an audience and deliver an artistic performance. This includes, for example, (members of) bands, singers, solo musicians and comedians. It is not important whether an artist performs alone or together with a company. One is not an artist if one does not perform for an audience (such as conductors or technicians).

Exceptions

However, there are situations where the artist regulations do not apply. Be careful in the following situations:

  • The artist has a declaration of employment relationship with profits from business (VAR WUO);
  • There is an appearance at a personal matter;
  • You do not pay the fee directly to the artist, but to someone with a withholding obligation statement. In that case, the withholding agent must assess whether the artist scheme applies;
  • You and the artist have an agreement of longer than 3 months.

VAR

Many withholding agents experience the application of the artist scheme as laborious. In that respect, you might be better off doing business with artists who have a VAR WUO. These artists have been classified by the Tax Authorities as self-employed and receive their income as Profit from Business. These artists must send you an invoice with VAT. To prevent risks, you should ask for the artist’s VAR WUO statement in advance and it is advisable to keep a copy of the VAR with your administration. In addition, you must also establish the identity of the artist by means of a copy of the ID. So don’t let the artist tell you that he has a VAR WUO without you having seen it. The risks are for you as the withholding agent, which may result in a fine.

Income from business

The artist who enjoys profits from business must declare this income in his income tax return. He may deduct costs incurred, such as travel expenses, clothing and perhaps costs for an accountant. This artist therefore has nothing to do with deductions and payroll taxes. The advantage for the artist is also that various entrepreneurial facilities apply to him, which means that less tax is owed, such as self-employed deduction, starter deduction, investment deduction and SME profit exemption. However, this artist must actually have a business. Simply performing on weekends for a small fee does not mean that the artist has a business. There must be a reasonable expectation of profit (so not as a hobby), he will have to run debtor risk and he will also spend an x number of hours on his business, for example building a website, issuing quotes or advertising. You will not encounter many artists with a VAR WUO.