Tax Treatment of Income from Copyrights

In 2019, copyrights income is deducted at source by the payers of income, the tax being the final tax.

Net income from intellectual property rights, including the creation of monumental artworks, is determined by income payers, legal entities or other entities that have the obligation to manage the accounting records by deducting from the gross income the expenses determined by applying the flat rate of 40% of gross income.

Tax is calculated by applying 10% of the net income (gross income – 40% flat rate) and retained at the source by the payers at the time of payment of the income.

The calculated and retained tax represents the final tax, declared in Statement 112 on the obligations to pay the social contributions, the income tax and the nominal evidence of the insured persons and is paid to the state budget until the 25th of the month following the one in which he was kept.

Social contributions in case of copyright

Individuals do not owe social insurance (CAS) and health insurance (CASS) for Intellectual Property Income if they earn income from salaries or pension income.

The income payer does not withhold social security contributions (CAS and CASS) if the beneficiary of the income is pensioner (retiree) or employed.

If the beneficiary of the income is not an employee or retiree, the payer of the income has the obligation to calculate, to deduct, to pay the social security contribution and the contribution to the health system in the following situations

  • He is the only payer of income and the estimated net income for the current year is at least equal to 12 gross national salaries in force in the year for which the contribution is due;
  • He is not the only payer of income and the estimated net income for the current year is at least equal to 12 gross national salaries in force in the year for which the contribution is due.

In this case, the beneficiary realizes copyright revenues from multiple sources, including other payers, but:

  • Whether the income earned at other payers is less than 12 minimum gross salaries per country in force for the year for which the contribution is due.
  • Whether the income earned at other payers is at least equal to 12 gross minimum salaries per country in force for the year for which the contribution is due, but the payer of the income is designated by the social rights payer’s contract.

In cases where the payer of the income has the obligation to pay the social contributions according to the above, he / she declares the social contributions in the Statement 112.

In the contract concluded between the contractual parts, the income payer is designated for the calculation, withholding and payment of the contribution by withholding, as well as the income chosen for which he owes the contribution, in the current year.

The level of contribution calculated and retained for each payment by the payer of income is that one set by the contractual parts up to the amount of the contribution of the chosen income specified in the contract (this income may not be less than 12 minimum wages per year).