Belgium: new copyright withholding tax rules

Belgium has amended its tax rules governing copy right income of artists and authors. The applicable rate has remained at 15%, but the lump sum deduction have been amended. For the first bracket of EUR 10,000 the lump sum deduction will be 50%, and for the next bracket of EUR 10,000 the deduction will be 25%.

In addition the tax treatment of copyrights has for individuals been standardized in the sense that such income is ? until the amount of EUR 37,500 – always to be considered as financial income (and thus subject to a 15% tax burden). Above this amount, the current rules remain applicable, which means that the income may be taxed as miscellaneous income (taxed at 33%) or professional income (taxed at maximally 50%).

The withholding obligation is broad and applicable retroactively from 1 January 2008. Commentators expect that this retroactive effect will ultimately be abandoned by the Constitutional Court.