EMMA calls for changes to withholding tax for European touring artists
The European Parliament is being urged to alleviate the financial burdens faced by touring musicians by overhauling and standardising the way in which “withholding tax” is applied by member states.
The call is led by the European Music Managers Alliance (EMMA), the umbrella organisation for more than 3,000 music managers across Europe, who have coordinated a letter to MEPs and EU Commissioners on the issue. It is backed by a wide cross-section of representative bodies for artists, musicians, independent labels, venues, clubs, and festivals as well as music export offices.
Withholding taxes are typically deducted as a percentage of an artist’s gross payment when they perform in a foreign territory. Theoretically, they provide a bond towards any taxes owed in the country of earning. However, in their application, no consideration is made of the actual costs and profitability of touring.
As a result, many artists – who are already facing dramatically rising costs of performances, transportation, accommodation and insurance – will overpay the tax they actually owe, resulting in further deficits or vastly reduced profits.
Compounding this situation, the lack of uniformity in reclaiming these overpayments is frequently an arduous and sometimes impossible task. As a result, small and mid-sized artists who lack the resources to chase what they are owed are disproportionately impacted.
By comparison, US artists playing in Europe benefit from international treaties that means no withholding tax is charged until they earn over a certain threshold – typically €20,000.
EMMA is recommending that European artists receive equal parity – either from a similar universally-applied threshold on earnings; or by standardising systems that are already operational in Denmark, Hungary, Ireland and the Netherlands, where no withholding taxes are imposed on foreign artists on short-term visits.