Pearle* launches campaign to make an end to the cross-border double taxation of artists
On the eve of 50 years of existence of article 17 (artistes and sportsmen) in the OECD Model Tax Convention, Pearle*, the principal body representing the live performance sector in Europe, calls upon the Member States who are also members of the OECD to remove double taxation. This cross-border tax obstacle is a result of the application of article 17, which gives a taxing right to the source country for live performances of nonresident artistes and artist groups.
Pearle* members represent over 5,000 performing arts entreprises and organisations across Europe. At their general assembly meeting last November in Brussels, they adopted unanimously a resolution including proposals to make an end to the double taxation of artistes. The entire sector is affected by the application of article 17 of the OECD Model Tax Convention: employers of artists, touring companies, individual artists, promoters or venues who programme foreign live performance groups. It is a major hindrance for the live performance sector to develop its activities in the European Union and worldwide.
"Our sector suffers from the decision taken nearly fifty years ago within the OECD which aims at counteracting tax avoidance behavior of a top layer of very famous artists living in tax havens": says Catherine Baumann, President of Pearle*. She continues: "The result is that since then thousands of performing arts organisations and millions of artists have been and are confronted with a double taxation situation. It is therefore time to address this discrimination and to apply the same conditions of taxation as for other companies and employees".
It’s been demonstrated in the past years through studies, publications, seminars, position papers and responses to consultations of the OECD and the European Commission, as well as through Case Law in the European Union, that the live performance sector is experiencing real difficulties when a country applies Article 17 on artistes and sportsmen of the OECD Model Tax treaty in its Double Tax Treaties.
Several concrete examples and cases give proof of the fact that there are extensive administrative burdens, long and cumbersome procedures to obtain tax credits, extremely complicated situations for employers to apply correctly withholding tax, difficulties to communicate with the tax offices in countries of performance and the availability of translated documents. In so far that some touring companies no longer want to perform in certain countries due to the difficulties arising following the performance abroad to deduct expenses and achieve tax credit in the country of residence.
For all of these reasons, the live performance sector calls upon the OECD and the Member States in the EU to take a decision in 2013, and to abolish the fifty-year-old provision which has led to the introduction of double taxation of artistes.
Live performance organisations are small and medium sized entreprises. They generally have a very small administrative staff, but provide jobs to at least one million people in the European Union alone. In these times of economic slowdown, the cultural and creative sectors, to which live performance belongs, are deemed to have a strong capacity to further develop and create jobs. However, in order to do so, obstacles preventing the sector from growing and generating more business must be reduced. The abolishment of double taxation is an important condition for achieving this.
Read the resolution in Pearle*'s position papers and take the time to send it to your Ministry of Finance!