Belgium | Reform of the tax regime applicable to income from authors' rights
Published on 31st Jan 2023
There are hopes that uncertainty over some of the terms used in the new law will be clarified
In the framework of the ongoing income tax reform, Belgium has decided to limit the scope of application of the special tax regime applicable to income from authors rights, with the aim of returning to the original objectives of the tax regime. These modifications apply to income earned as of 1 January 2023.
Since 2008, Belgian tax legislation has provided for a special tax regime applicable to income derived from authors rights, which was originally justified by the irregular and unpredictable nature of this income. Over the years, the tax regime became a way for some employers to provide an alternative and tax-advantageous way of remunerating their employees, even in sectors not concerned by these initial considerations (including the IT and marketing sectors).
With the objective of returning to the initial objectives of the regime, the scope of application will be limited, as of 1 January 2023, to income derived from authors rights that are licensed or transferred with the intention to proceed to a communication to the public or to a public performance. Moreover, the regime will now only apply to authors rights relating to "literary or artistic work" and to "artists' performances". The tax regime should therefore not apply to softwares and other works produced in the IT sector.
There is some uncertainty about some of the terms used in the new law which it is hoped will be clarified. For now, the IT sector is expected to be excluded to a large extent from this advantageous tax regime. However, the new regime will remain applicable to excluded works/sectors in 2023 on the basis of transitional measures.
Regime unchanged
The tax regime itself remains essentially the same as before. Indeed, the new version of the regime still provides for a 15% taxation of the income derived from eligible authors rights up to €64,070 (amount subject to indexation) and for a lump-sum deduction for professional expenses. Income that exceeds this threshold or that does not qualify under the new scope of application will generally be subject to the ordinary progressive tax rates per bracket as applicable for professional income (up to 50%).
Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.
