As is known, law 23 December 2014, n. 190 (so-called stability law 2015), in article 1, paragraphs 54 to 89, introduced a preferential tax regime, so-called flat rate regimeaddressed to taxpayers who are natural persons carrying out business activities, arts or professions, in possession of certain requirements.
The regime introduced, by virtue of the changes made, has proven to be attractive and embraces one large segment of taxpayers.
Taxpayers, natural persons carrying out business activities, arts and professions, apply the flat rate regime if in the previous year they have achieved revenues or received compensation not exceeding 85,000 euros.
These fees must be declared in PF Income modelin lines from LM22 to LM27.
On the topic relating to taxation of copyright for flat-rate subjects, if the proceeds obtained by way of copyright are to be included in the calculation of the threshold of 85,000 euros (then 65,000), two recent interventions in practice should be included, which can serve as a guide.
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The position of the Revenue Agency on self-employment income
Circular no. 9/E/2019 is based on art. 53, paragraph 2, letter b), of the TUIR, which also considers self-employment income:
“income deriving from the economic use, by the author or inventor, of intellectual works, industrial patents and processes, formulas or information relating to experiences acquired in the industrial, commercial or scientific field, if they are not achieved in the exercise of commercial enterprises.”
For Revenue:
“given the peculiar nature of the aforementioned incomes, they will contribute to the verification of the limit of 65,000 euros (today, 85,000 euros) only if correlated with the self-employment activity carried out, a circumstance which will be deemed to exist if, on the basis of an examination of the specific facts and circumstances, the same would not have been achieved in the absence of carrying out the self-employed activity.”
For example, in our opinion, for a lawyerthe publication of a contribution in a tax magazine will be relevant, while if the same lawyer writes for a cooking magazine the fee will not be relevant.
Taxation of copyright in the flat rate regime: how it works
The methods of taxation of compensation for Copyrightif subject to flat rate regime, were promptly examined in the response to question no. 517/2019.
In the case in question, a company asks to know whether, as a withholding agent, it must carry out the withholding tax on compensationFor Copyright connected to the activity of self-employment, paid to professionals who make use of the flat rate regime referred to in law 23 December 2014, n. 190, as amended by article 1, paragraphs 9 to 11, of law 30 December 2018, n. 145.
In the opinion of the applicant, the interpretative doubt arises in relation to the clarification contained in the circular dated 10 April 2019, n. 9/E with which the Revenue Agency specified that:
“If the taxpayer earns proceeds by way of copyright, pursuant to article 53, paragraph 2, letter b) of the TUIR, even if effectively correlated with the self-employed activity carried out, the taxation methods remain unchanged of the same provided for in paragraph 8 of the following article 54.”
With the additional documentation, the applicant specified that:
- the contracts stipulated concern artistic/professional collaboration for the purpose of creating intellectual works;
- in the notes signed by the workers, the same “in the case of false declarations and the formation or use of false documents, he declares[no] that the operation is carried out under the flat-rate regime (…) as it is connected to the self-employed activity carried out with a VAT number (…)”;
- “professionals who carry out self-employed work under the flat-rate VAT regime towards ALFA and who, moreover, transfer a copyright in relation to the activity carried out, sign contracts with the Company called “for mixed services”. The object of the mixed service may consist, for example…”
In particular, the applicant requests to know whether the statement mentioned in the aforementioned circular no. 9/E of 2019 is to be understood as a clarification of the criteria for determining the tax base of copyright (25 percent or 40 percent) on which to apply the substitute tax specific to the flat rate regime or whether, instead, the clarification is aimed at subjecting royalties for royalties to ordinary taxation, despite the fact that they contribute to the possible reaching of the limit threshold of 65,000 euros in order to benefit from the flat-rate regime referred to in law no. 190/2014, as amended by article 1, paragraphs 9 to 11, of law no. 145/2018.
The petitioner believes that i royaltiesconnected to the self-employment activity paid to professionals who make use of the flat-rate scheme, contribute to the eventual achievement of the threshold required to be able to benefit from the flat rate regime and they will discount the substitute tax instead of the ordinary one.
Consequently, the client who acts as a withholding agent will not have to withhold withholding tax on such compensation.
In particular, the instant highlights that it operates in the following manner.
To the collaborator who receives royalties you are asked to submit:
- a declaration, under one’s own responsibility, that the compensation received by ALFA for copyright is related to the self-employed activity carried out under the so-called flat-rate regime and that, therefore, falls within the ceiling of 65,000 euros;
- a note indicating the personal data, the amount of royalties and the details of the so-called regime rule. flat rate.
Copyrights and flat rate regime: the opinion of the Revenue Agency
The Revenue, after having carried out a detailed reconstruction of regulations and practices, in line with what has already been clarified with resolution no. 311/E of 21 July 2008 in relation to the tax regime for so-called taxpayers “minimum”they believe that even for taxpayers who apply the flat rate regime under examination the transfer of copyright during the stay in the regime is subject to the methods of compensation certification provided for this regime and is subject to substitute tax provided for by paragraphs 64 or 65 of article 1 of law no. 190 of 2014.
Consequentially:
“whenever there is an effective correlation between the proceeds deriving from the transfer of copyright and the self-employment activity carried out, the proceeds must, on the one hand, contribute to verifying the limit of … for access or permanence in the flat-rate regime and, on the other hand, they will be subject to the substitute tax referred to in paragraphs 64 or 65, with the particularities that the flat-rate cost reduction rates will be those provided for in article 54, paragraph 8, of the TUIR.”
In other words:
“the proceeds by way of copyright, pursuant to article 53, paragraph 2, letter b), of the TUIR, obtained by a taxpayer who applies the flat-rate regime, if effectively correlated with the self-employment activity carried out by the same individual, will be reduced by 25 percent (or 40 percent if they are received by individuals under the age of 35), pursuant to paragraph 8 of article 54 of the TUIR, and this amount will be cumulated with the other compensation received by the professional subject to the ordinary flat-rate abatement rates referred to in annex 4 of law no. 190 of 2014, in order to apply to the overall amount the substitute tax referred to in paragraphs 64 or 65 of article 1 of law no. 190 of 2014.”
In the present case, the applicant, as withholding agent, “will not have to make any withholding tax on the remuneration for copyright actually related to the self-employment activity, paid to professionals who make use of the flat-rate regime”.
To this end, the instant “has the burden of acquiring a declaration from the professional, under his own responsibility, that the compensation received for copyright is related to the autonomous activity exercised under the so-called flat-rate regime”.
The Revenue also specifies that:
“if the applicant does not exploit any copyright or if the applicant’s commission agents were to carry out in favor of the applicant an activity effectively attributable, for tax purposes, to an employment relationship from which to derive employment income or assimilated to that of employed work, in the first case they could not apply the provisions of article 54, paragraph 8, of the TUIR and in the second case they could not apply the flat-rate regime in question and the applicant would fall under the obligation to implement the withholding tax in accordance with the law, the aforementioned declaration issued by the commission agents themselves being of no importance.”
Therefore, the fees for Copyrightif subject to flat rate regimemaintain their own income determination methods, with reduced taxation of 25 percent or 40 percent depending on age and subject to substitute tax.
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