Bid to end cross-border double taxation of performers
A campaign to fight the double taxation of artists who work abroad has been launched by a European performing arts trade organisation.
Currently, performers can be taxed in the foreign country they are working in, as well as their country of residence, due to a global treaty aimed at preventing tax evasion.
The Performing Arts Employers Associations League Europe (Pearle) wants to put a stop to this double taxation, claiming it is a “major hindrance” for the arts sector.
Pearle director Anita Debaere said that although performers can offset the income tax suffered when working in a foreign country by applying for a tax credit against their tax bill in the UK, this is often a very complicated procedure. This tax credit is also only available up to the rate of income tax in the UK.
There are also difficulties when artists try to establish their expenses and net income earned abroad, Debaere said, because of difficulties in communicating with foreign tax offices and the availability of translated documents.
Mark Pemberton, director of the Association of British Orchestras, said touring in Europe can be very problematic because orchestras will, on average, visit around four countries in the European Union during a tour.
This leaves performers having to contend with several different tax rates and rules when filling out their tax return for a credit in the UK, he said, which creates an “administrative burden” for the individual.
“The whole thing is highly bureaucratic, very expensive and very time-consuming. If it didn’t exist, then our members would leap in the air with joy because it puts them to a lot of work and effort,” said Pemberton.
He added: “What we really need is a simpler system and commonality [of taxation rules] across the EU, because one of the common principles of the EU is the mobility of workers and we believe that unnecessarily bureaucratic and expensive ‘withholding tax’ regimes is an impediment to the free movement of artists.”
Global inter-governmental body the Organisation for Economic Co-operation and Development, which created the model treaty for prevention of double taxation, also produced a section called article 17, which applies different rules to artists and sportspeople. This article allows the foreign country where the non-resident is performing to apply a tax, and was designed to create an obstacle for high-earning artists and sportspeople trying to evade tax.
Debaere said: “Pearle’s goal is to abolish article 17 in the OECD Model Tax Convention treaty, and ensure artists performing abroad are treated the same as other people [in other professions] working abroad.”