As a result of the Corona pandemic, many cultural institutions in particular had to install an extensive streaming offer on their websites instead of face-to-face events. Remuneration is often paid to foreign artists. Then the question is when and with what proportion the payments for streaming offers with foreign artists are subject to the tax deduction according to § 50a EStG. There are problems that arise, which are explained in this article.

We clarify how influencers write off intangible assets, i.e. social media accounts and personal rights.

Cultural institutions have regularly offered streaming services due to the Corona pandemic. The artists who perform are often foreigners and can therefore only be taxed to a limited extent in Germany. The question therefore arises whether any remuneration paid to them is subject to the withholding tax deduction pursuant to § 50a (1) EStG for limited taxpayers. For streaming offers with foreign artists, a distinction must be made between live streaming and a performance that can be accessed over a longer period of time.

In a live stream, the performance is broadcast directly to the Internet. Therefore, the live stream represents part of the performance in itself. Therefore, the question of the withholding tax deduction depends on the place of activity. § 50 (1) no. 1 EStG expressly requires a performance in Germany. If, for example, the foreign artist was in an empty German theatre hall when recording the performance in Germany, the full amount of the artist’s remuneration is subject to the tax deduction pursuant to § 50a (1) no. 1 EStG. The artist then earns income within the meaning of § 49 paragraph 1live no. 3 in conjunction with § 18 paragraph 1 no. 1 EStG. In this respect, it is irrelevant that no audience was present in the hall, as the concert was accessible to an audience live via the Internet.

The case is different if the artist is filmed abroad and the stream is offered as a live stream. Then it is a performance abroad. The remuneration of the artist is therefore not subject to any tax deduction in Germany.

Viewers are regularly invited to donate during the live stream. The amounts transferred to a foreign artist then constitute income within the meaning of § 49 (1) no. 3 in conjunction with § 18 (1) no. 1 EStG, since an independent artistic activity was exploited in Germany. However, if the artist now carries out his work in another country, the facts of § 50a (1) are not fulfilled. The donation can therefore be transferred abroad without deduction. Therefore, due to the lack of withholding tax law, the artist does not have to be assessed at any German tax office. Live streaming offers with foreign artists from abroad are therefore generally tax-advantageous.

Problematic are streaming offers with foreign artists, where the recording is not only broadcast as a live stream, but can be accessed on the website over a longer period of time. Then there are actually two service packages. On the one hand, there is the performance itself and the exploitation of the performance. After the BMF, the service is divided into 80% performance and 20% utilization if there are no call numbers from which it can be derived how many people have watched the stream.

In a double taxation agreement, the exploitation of the performance is regularly classified as a royalty within the meaning of Article 12 of the OECD-MA and is therefore exemptable or only reduced taxable in the source country of Germany according to many double taxation agreements. Accordingly, 80 % of the remuneration according to § 50a (1) no. 1 EStG must be taxed with the withholding tax. The other 20 % are subject to withholding tax under Section 50a (1) no. 3 EStG, but are exempt under the double taxation agreement.

Many offers are not put live on the net, but only published a few days after the recording. It is crucial whether the foreign artist takes a recording exclusively for the domestic provider and lets it come or whether he makes an already existing recording available. The provision of an already existing recording falls under § 50 a (1) no. 3 EStG as a transfer of rights. Therefore, the remuneration is fully deductible. However, it is possible that it is exempted or taxed low under the respective double taxation agreement. The exclusive recording must be differentiated. Of these, 40 % include non-deductible activity remuneration, while the other 60 % is a deductible transfer of rights.

Streaming offers with foreign artists always lead to the deduction obligation when the activity is started in Germany. However, if the recording took place abroad, there is only a deduction obligation if it is not live streamed, but can be retrieved over several days. For the records retrievable several days, the respective double taxation agreement then applies the license fee article Article 12 OECD-MA. However, the remuneration debtor cannot invoke Article 13 OECD-MA directly. § 50d (1) EStG provides as a Treaty Override that the parties must either seek the exemption procedure before the payment of the remuneration or, after the payment, the reimbursement procedure with the BZSt.