“In current tax law, article 2 of the amended law of 4 December 1967 on income tax determines the conditions to be met by an individual in order to qualify as a taxpayer subject to income tax in Luxembourg. According to this article, a distinction must be made between resident and non-resident taxpayers, depending on whether or not the individuals have their tax domicile or habitual residence in the Grand Duchy.
In this respect, the tax regime applicable to artists, who are taxpayers in the same way as all other individuals who receive income, varies according to their tax residence, i.e. whether they are an artist resident in Luxembourg or a non-resident artist who nevertheless receives income from Luxembourg sources.
Here, resident artists are (…) subject to an unlimited tax liability which extends to their worldwide income, i.e. to both their domestic and foreign income. On the other hand, for non-resident artists (self-employed or salaried), only income from Luxembourg sources (…) gives rise to taxation in Luxembourg, unless a tax treaty for the prevention of double taxation concluded by Luxembourg and the artist’s State of residence provides otherwise.”[1]
The Amended law of 19 December 2014 relating to 1) social measures for the benefit of independent professional artists and intermittent workers and 2) the promotion of artistic creation foresees in its articles 11,12 and 13 a couple of fiscal measures for professional artists and intermittent workers.
VAT
“Only the “self-employed” artist (as opposed to the “employed” artist) is likely to become subject to Luxembourg VAT, provided that he supplies goods (e.g. sale of paintings, sale of records, books etc.) or performs services (e.g. performances in the theatre, dance, shows) on a non-occasional basis and for remuneration in Luxembourg.”[2]
As part of the implementation of the current Cultural development plan (KEP), a super-reduced VAT rate of 3%, applicable to the services provided by writers, composers and performers, as well as to the royalties due to them, is introduced as of 1 January 2020.
Patronage, sponsorship
“To promote sponsorship, the tax law provides for the tax deduction of financial aid or donations disbursed by any natural or legal person.”[3]
[1] https://culture.lu/cadre-de-travail/25
[2] https://culture.lu/cadre-de-travail/26
[3] https://culture.lu/cadre-de-travail/31
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