How does the artist scheme work?
Artists can choose to have their client pay wage tax and premiums on their earnings. The client then employs them for a short period. This can also have an impact on turnover tax.
There are two possible scenarios:
- The artist rule is applied, and no VAT is charged. Those who decide not to charge VAT cannot deduct VAT as input tax on expenses, either.
- VAT is charged, and artist regulation is thus disregarded. Those who decide to charge VAT calculate the VAT on the total amount of the fee. This includes salary, expenses, payroll taxes, and bonuses paid by a client for artists. It is possible to deduct the VAT you paid on the business expenses as input tax.
Conditions for the artist scheme
The artist scheme can be chosen if the following three conditions are met:
- They do not charge VAT.
- They do not use a “profit from business” (VAR-wuo) or a “director-majority shareholder” (VAR-dga) employment declaration.
- The performance/presentation takes place in the Netherlands.
Orchestras and music bands
Regularly performing orchestras and music bands are entrepreneurs for VAT purposes. They may also choose not to be an entrepreneur for VAT purposes. The prerequisite for this is that no member of the orchestra or band is an entrepreneur for VAT purposes. Musicians who are entrepreneurs for VAT purposes: Those who only fill in temporarily, for example, in an orchestra, do not have to charge VAT on this income. The prerequisite for this is that the position in the orchestra corresponds to that of the permanent members.