Representatives of creative professions: Changes in the royalty regime are unfair – Branches – Financenet

Arno Jundze, Chairman of the Latvian Writers’ Union (LRS), believes that the planned changes in the royalty system will worsen the position of creative persons, and this is not acceptable.

Ms Mistress expressed a proposal from the Ministry of Finance that, in essence, could worsen the financial situation of creative people during the Covid-19 pandemic and “make it more difficult for the already foggy opportunities to work in the profession and survive”.

Sculptor Kristaps Gulbis, on the other hand, has calculated that by applying the proposal of the Ministry of Finance to one author’s work, the tax burden increases three times, but the “net profit” is about three times less. Gulbis emphasized that such a reduction in income is extremely important for creative people.

Gulbis said that artists and sculptors plan to come up with their own proposals. One of them is to maintain the current amount of taxes on royalties and to allocate 80% of this amount to the mandatory state social insurance contributions (SSIAI) and 20% to the personal income tax (PIT). It is also planned to offer that royalties agreements can be concluded only by people who have the status of a creative person.

Gulbis said that one of the reasons mentioned in the public space for the planned changes is related to the fact that royalties are not only received by creative workers, however, in his opinion, the FM offer does not indicate that it is intended to reduce the number of people who close. royalty agreements.

Ms Hope hoped that journalists would also take part in the discussions.

“Media owners should also speak out and say that they will not be able to exist in the way that is being proposed.”

said the chairman of the LRS.

“It’s absurd! If you plan to deduct 25% of royalties, creative people would like to get what everyone deserves, namely a full basket of social insurance services,” Jundze emphasized.

He also explained that until now, performers of creative work could deduct the eligible expenses of authors from royalties, but after 2021, only in one of the proposed tax regimes the eligible expenses are retained. Jundze explained that based on the FM offer, the author will pay more, but they will receive less.

“It is clear that there will be problems for both those who receive relatively small royalties and those whose royalties are in the tens of thousands.

It can be seen that the changes to the royalty regime have been developed by people who do not understand the real situation. “

“In essence, they are proposing to abolish royalties as such, leaving only the name. The pretext of social protection for artists and other creative workers is a subtle march of advertising,” says Kristaps Gulbis, noting that

Representatives of creative unions are considering the possibility of requesting the resignation of the Minister of Finance Jānis Reirs (JV), as the proposal of the Ministry of Finance is not oriented towards the sustainability of the country.

According to the sculptor, if in a modern, democratic and European country, such as Latvia, the Ministry of Finance makes such an offer, the Minister must resign. Gulbis expressed hope that if doctors managed to achieve an increase in funding for salaries, then there are similar opportunities for creative workers.

“The achievements of doctors give hope that we will also find hearing ears in the Saeima, so that such changes were not accepted,” the artist emphasized.

Arno Jundze, on the other hand, pointed out that the proposal of the Ministry of Finance also discriminates against creative persons, for example, sickness benefit will be paid only from the 11th day, it is not clear whether creative persons will be able to claim a tax deduction if he is responsible for dependents.

It has already been reported that the Cabinet of Ministers on Friday supported changes in the PIT payment regime for royalty recipients.

At an extraordinary meeting of the Cabinet of Ministers, amendments to the Law “On Personal Income Tax” prepared by the Ministry of Finance were considered. The draft law envisages making changes in the PIT payment regime applied to the current recipient of royalty income. The aim is to impose a proportionate tax burden on royalties and to simplify the tax regime for PITs and SSIAIs.

The draft law envisages, in the period from 1 July to 31 December of the following year, to apply a special tax payment regime to recipients of royalties who are remunerated by an income payer who is not a collective management organization and who have not registered economic activity.

In the second half of the following year, a person who receives royalties and has not registered an economic activity, the payer of income withholds tax in the amount of 25%, of which 80% is transferred to the SSIA, and 20% – to the PIT.

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