Income from author rights: an interesting tax incentive for freelancers

Belgian income taxes on professional income are among the most prohibitive regimes in the world. The recent crisis will most probably not allow our government to reduce the tax pressure in the coming months.

Nevertheless, Belgium provides for specific tax ‘niches’ allowing to mitigate the pressure. One of these incentives provides for a favorable tax regime applicable to income deriving from author rights. Qualifying profits are taxable at a reduced rate of 15% (against more than 50% according to the normal regime).

The incentive is only applicable to certain types of income. The first question to investigate is whether your income would qualify for the incentive. Many creative activities lead to the exploitation of a ‘work’ protected by intellectual property rights. This is where the incentive can be invoked.

Another important element is the social status of the taxpayer. It will have an impact on the availability of the regime and on its implementation. Considering the conditions imposed by this regime, the business model is also relevant: the use of a work for professional purposes does not automatically mean that the taxpayer derives income from it.

Benefiting from this regime will also often require the documentation used by the taxpayer to be adapted in order to meet the legal requirements.

If certain investments must be made to put the regime in place, they will in most situations allow substantial tax savings. Feel free to post your job to get the best lawyers assisting you! If you want to take advantage of this regime here.👇

NB: The tax regime applicable to the author’s rights is currently under review by the Belgian government and lawmakers. It is advisable to wait until the amendments to the existing regime will be known before undertaking any action aiming at applying this regime. In the meantime or for any questions, feel free to contact our partner, uLaw.