THREE NEW TAX CASES BEFORE THE EUROPEAN COURT OF JUSTICE 30/12/04
After the sucess of the 2003 Arnoud Geriste case in Germany, All Arts Tax Advisors partner Dick Molenaar reports that there are now three new tax cases pending before the European Court of Justice (ECJ) regarding the taxation of non-resident artists: These are FKP Scorpio Konzertproduktion (C-290/04), Centro Equestro de Leziria Grande Lda. (C-345/04) and Centro di Musicologia Walter Stauffer (C-386/04).
In all three cases, the German Bundesfinanzhof (Supreme Court) has raised preliminary questions to the ECJ, whether the German taxation of non-resident artists is in accordance with the EC Treaty. The Arnoud Geriste case held that Article 49 and 50 of the EC Treaty (previously articles 59 and 60) precluded a national provision which, as a general, rule taxed non-residents on gross income without allowing for the deduction of business expenses whilst allowing residents to deduct such expenses before a tax on net income. The case also held that a fixed rate of 25% was allowable on non-residents provided this would not be a different taxation rate to residents taxed on a progressive scale but on net income. However the decision has only been partially applied by Germany in its legislation while other countries, such as France, Spain, Italy, Greece, Portugal, Czech Republic and others have simply ignored the decision of the ECJ.
Dr. Harald Grams (of German tax advisors Grams und Partner) has pushed forward the case of FKP Scorpio Konzertproduktion: in this case a German promoter Scorpio contracted with a Dutch tour promoter in 1993 for performances by American and European artists in Germany. Scorpio did not pay any German withholding tax and the tax authorities raised massive tax assessments because of breach of §50a of the German Einkommensteuergesetz (Income Tax Law). The Bundesfinanzhof raised four questions to the ECJ:
The Scorpio case attacks the artist tax system more explicitly than the Gerritse case and the German tax authorities have already allowed organizers of performances to postpone the payment of the withholding tax for non-resident artists. The case of Centro Equestro de Leziria Grande Lda concerned The German Einkommensteuergesetz (Income Tax Law) and the very strict application of tax refunds for non-resident artists. The german tax authorities have created the Vereinfachtes Erstattungsverfahren (Simplified Tax Refund Procedure), but only expenses that are directly connected with the performances are taken into account and these expenses need to be more than 50% of the earnings. Applications are only considered when the original invoices are attached. The procedures are somewhat complex and not widely used.
The Portugese company Centro Equestro de Leziria Grande wanted to make use of the procedure, because it had paid 29% withholding tax on the fees for its 11 horse shows in 1996 in Germany, but had calculated afterwards that the total expenses (both direct and indirect) had been higher than the gross earnings. One of the horses had died during the German tour, giving and additional depreciation for the book value of the animal. The German Bundesamt für Finanzen (Tax Office) rejected the application for a full tax refund because the indirect expenses were not accepted. The Bundesfinanzhof raised the question to the ECJ, whether this strict procedure is correct under the EC Treaty, because German resident artists and sportsmen are taxed on their net income, after the decution of all their business expenses.
The final case is Centro di Musicologia Walter Stauffer. This case concerns an Italian non-commercial foundation that is educates classical music students. The institution is exempted from the Italian l'imposta sul reddito delle persone giuridiche (Corporation Tax) and comparable German institutions would be exempted for the German Körperschaftssteuergesetz (Corporation Tax Law). The Centro di Musicologia Walter Stauffer had rental income in Germany, was taxed under § 50a of the German KStG, but could not make use of the exemption for cultural institutions, because it was not based in Germany. The German Bundesfinanzhof has raised the question to the ECJ, whether this exclusion for non-resident institutions is correct under the EC Treaty as an Italian institution would suffer tax on income whereas as comparable German institution would not. All these cases are food for thought and the live music industry must be hopeful that a proactive ECJ will lead to major revisions in national legislation in Germany and elsewhere, at least in as much as taxes are applied to artists from EC member states.
QUEEN TO PLAY AIDS BENEFIT FOR NELSON MANDELA FOUNDATION AND TOUR IN NEW YEAR 29/12/04
Queen will make their first appearance with new vocalist Paul Rodgers at the second 46664 SOUTH AFRICA concert next year. The band will play at the event which will take place at the Fancourt Hotel And Country Club Estate on March 19th.
The gig has been organised by Nelson Mandela to fight against HIV and AIDS.
Making the announcement, former President Mandela said: "46664 South Africa will build on the success of our truly memorable concert in Cape Town last year. It will serve to support the efforts of the Nelson Mandela Foundation and to show the world that South Africa is really addressing this most vital issue. And most importantly, it will help us raise more funds to lead the fight to help those infected and affected by this pandemic."
A number of international artists have signed up for the the concert, together with several South African artists. The full line-up will be revealed early in the New Year. Queen have also said that a UK tour will definitely go ahead, with the possibility of a European leg and a world tour under discussion. The tour will feature material by the band and from Rodgers, one-time vocalist with both Free and Bad Company. Queen last toured in 1986. Original vocalist Freddie Mercury died of an AIDS-related illness in 1991.
source: www.nme.com
UK GOVERNMENT PROPOSES TAX ON MAJOR LIVE EVENTS 29/12/04
In a move which will surprise hardly any live music industry professionals in the UK, the Government is proposing a new 'tax' on all live events which take place at a temporary site - and involve more than 6,000 persons with alcohol served. In effect a new tax on all major outdoor events and music Festivals.
Having heralded in a 'new era' of licensing with the new Licensing Act 2003, industry commentators were already suspicious of the brave new world of licensing - would it really be more effective, more sympathetic and more supportive of the live music industry and consumers? or would it be be another administrative and bureaucratic hurdle with stealth tax atached?
From February 7th Local Authorities must issue standard charges for health and safety inspections replacing an ad hoc system at the moment where many Local Authorities use their discretion when looking at charity events or events which would generate local benefits (such as income coming into the area and local employment). Well, as many predicted what it seems the Government really want to do is centralise, take away discretion and make the system more expensive for the end user through a national tariff. A new tax, payable to local authorities who carry out licensing heath and safety examinations, of up to £50,000 per event, is proposed in a new consultation paper from Culture Secretary Tessa Jowell at the Department of Culture Media and Sport (DCMS).
For example an event
of between 30,000 and 40,000 persons would be taxed £15,000.00. Huge
festivals like Glastonbury or Reading would be expected to be paying close to the maximum tax fee. The proposed charges will extend to concerts in stately homes, charity events such as the Prince's Trust Party In The Park.
The tax would also extend to other rural events such as horse trials, outdoor jazz concerts, beer festivals, point to point racing and county fairs. The DCMS argue that the 'tax on fun' is necessary to reimburse local authorities for the cost of carrying out health and safety checks which are necessary to ensure fire and crowd safety. The Times newspaper (24 December 2004) reports that Conservative Party Culture Spokesman John Whittingdale has said he will raise the issue in the House of Commons as a matter of urgency.
JINGLE BELLS, JINGLE BELLS 21/12/04
Well, as we can't think of a sweet and fluffy christmas story at Round The Clock News this year (although, yes, Band Aid 20 is the new UK number One) so instead here is the top ten of Christmas mobile phone ringtone downloads courtesy of the MCPS/PRS Alliance returns showing who sang the 'famous' version:
NEW CHAIR FOR PRS AND NEW CEO FOR ALLIANCE 21/12/04
The new PRS Chairman is Ellis Rich, currently Deputy Chairman and Ellis takes over the position on January 01 2005. He takes over from current Chairman David Bedford who has completed a three year term of office. Steve Porter has been promoted to MD of the PRS-MCPS Alliance. The MCPS have also announced new increased administration rates after the fall in record sales and a fall in prices hit revenues.
UK RECORD INDUSTRY URGES COPYRIGHT REFORM IN EUROPE 21/12/04
The UK record industry is urging the UK Government to put pressure on the European Commission to review the term of copyright for soundrecordings which currently stands at 50 years in Europe (compared to life of author plus 70 years for songs and compositions). The Music Business Forum claim that the comparatively short term of protection is a disadvantage for Europan record labels. In the USA protection lasts for 95 years and Australia will soon extend its sound recording copyright to 70 years. In Europe recordings by Elvis and Cliff Richard are now coming out of copyright.
BAND AID
FUND TOPPED UP BY £7 MILLION 20/12/04
One of Scotland's leading businessmen has decided to donate up to £7
million (E10 million approx) to Sir Bob Geldof's Band Aid by matching the proceeds of the newly recorded Band Aid single and the Live Aid DVD. Tom Hunter pledged the money after watching recent television programmes which he said showed how 'little things had actually changed' but said that there was an opportunity now to eradicate world poverty in 'our lifetime'. The sportswear tycoon met up with Sir Bob to pledge the money last week.
CROWD MANAGERS EMBARK ON NEW FOUNDATION DGREE AT BCUC 19/12/04
25 top crowd safety managers this week became the first students to study for the newly accredited Foundation Degree in Crowd and Safety Management at Buckinghamshire Chilterns University College (BCUC). The managers, who included crowd managers, venue operators, event production staff as well as members of the police force, attended an induction session for the groundbreaking course at BCUC's Wellesbourne Campus on 14 December. Parts of the rest of the course will be delivered 'on the job', with the students also taking advantage of the e-learning facilities provided by BCUC's internet 'Blackboard' service.
The Foundation Degree in Crowd and Safety Management has been developed over a period of two years in conjunction with a panel of industry professionals. Both the NCFE and SITO, two awarding bodies for the stewarding and security industries, were involved at every stage and is designed to promote increased professionalism across the crowd safety industry and will help develop best practice according to Professor Chris Kemp, The Foundation Degree Programme Head.
Other industry professionals who helped develop the course are Mick Upton, Joachim Cortez manager Iain Hill and industry lawyer Ben Challis. All member companies of the United Kingdom Crowd Management Association (UKCMA) have enrolled key members of staff onto the course and the programme has been heavily supported by the PSA (Production Services Association).
ELVIS ESTATE SOLD FOR $100 MILLION 17/12/04
Robert Sillerman has paid $100M to acquire 85% of the Elvis estate. He will pay $53M in cash, assume $25M of the estate's debts and make up the balance in shares. Lisa Marie Presley will retain the other 15%. As part of the deal, Sillerman will acquire rights to Elvis' music, his name, his likeness, his photo rights and the running of Graceland and its lucrative tourist business.
Some 650,000 people visit Graceland each year. Pricilla Presley will remain an executive consultant to the business. Recently Forbes named Elvis as the biggest-earning dead celebrity, with his estate generating $40M a year.
Sources: www.reuters.com & enjoyment.independent.co.uk
JAMES BROWN CANCER SCARE 12/12/04
Soul legend James Brown has prostate cancer and will have surgery next week. The Godfather of Soul has given himself just three weeks to recover from the operation before starting promotional work on his new book and he also has plans to tour Asia and Australasia. He also plans to record a new album with the Black Eyed Peas in early 2005.
LONDON JAZZ VENUE FACES NOISE NIGHTMARE 12/12/04
The Bulls Head in Barnes is one of London's eclectic jazz venues, described by broadcaster Humphrey Lyttleton as an 'institution'.
But the venue is facing a £175,000 soundproofing bill after new neighbours
complained to the local authority about noise.
Richmond Council had changed the status of the area from light industrial to residential when a block of flats was built next door and now one neighbour has lodged a complaint leading to the council to enforce a noise abatement order which must be completed at the venue by February 2005 or live music must cease after a 45 year history of live jazz.
USHER TOPS BILLBOARD AWARDS 11/12/04
R'n'B sensation Usher ended up with an armful of gongs when he picked up 11 awards and the Billboard Music Awards. His haul included artist of the year, best r'n'b/hip hop album for Confessions and Hot 100 single of the year for Yeah!(feat Lil John and Ludacris). The singer opened the show with a spectacular version of Bad Girl. Alicia Keys up seven awards including best female artist and Hot 100 songwriter of the year
JAY-Z TO HEAD UNIVERSAL'S DEF JAM 11/12/04
Shawn Jay-Z Carter has been signed up by Universal to head up its Def Jam hip-hop label, The best selling rap artist is said to be a 'relevant and credible'Antonio Reid, Chair of the Island Def Jam Music Group at Universal. Under the deal Jay-Z will have the authority to sign acts to his own Def-Jam distributed venture.
DVD FORMAT WARS HOT UP 11/12/04
The Walt Disney company has joined in the DVD wars by backing Sony's new blu-ray standard. Blu- Ray is the alternative format to the Toshiba backed HD-DVD format which has been backed by a number of other Hollywood studios including Warner Bros, Paramount and New Line. Sony already has the MGM catalogue in its control after agreeing to buy the studio for $5 billion in September.
Both formats use blue lasers with shorter wavelengths which allow discs to store more information and produce sharper pictures needed for hi-definition films and television. This year's Glastonbury Festival filmed its legendary main Pyramid Stage in Hi-definition television for broadcast in the USA (on RAVETV) and Japan (with Fuji).
KAYNE WEST TOPS GRAMMY NOMINATIONS 11/12/04
Kayne West , the Chicago rapper, has notched up 10 nominations for this year's Grammys. The Universal act is ahead of Sony-BMG's Alicia Keys who picks up 8 and Usher who is also tipped for 8 gongs. The much missed Ray Charles picks up 7 nominations for Genius Loves Company, his last released album of duets.
DAMAGEPLAN GUITARIST SHOT DEAD ON STAGE 10/12/04
A gunman has charged into a packed Ohio nightclub and opened fire on the band and crowd, killing top heavy metal guitarist Darrell "Dimebag" Abbott and three other people before a police officer shot him dead.
Abbott played for the Texas-based band Damageplan and was originally in heavy rock legends Pantera. The police identified the gunman as Nathan Gale, 25, but had no information on a motive or any connection to the band. The gunman had a hostage in a headlock and seemed to be preparing to kill him when police officer James D Niggemeyer shot him without injuring the hostage, police said.
Damageplan had just begun its first song at the Alrosa Villa Club when the man shot Abbott five or six times at point-blank range.
SANCTUARY BID RUMOURS 08/12/04
The Times (8 December 2004) has reported that the share price in independent music group Sanctuary has jumped by about 2.5% on reports of a rumour that there is predatory interest from Warner Music. Warners are said to be keen to increase their interests in artist management and merchandising, ahead of a possible US floation next year. Sanctuary already have wide management interest including Destinys Child, Beyonce and the Manic Street Preachers.
LA SCALA RE-OPENS 08/12/04
Milan's La Scala opera house has re-opened after a three year refurbishment with a performance of Salieri's Europa Riconoscuitia. The gala event was attended by Prime Minister Silvio Berlusconi, heads of state and ambassadors along with Milan's rich and famous, each paying up to E2000 for a ticket and the paying who had queued all night for E50 tickets. The event was relayed to wide screens in Milan and theatres across Italy.
UNIVERSAL ACQUIRES MISSING HALF OF ROC-A-FELLA 08/12/04
The NY Post reports that Universal Music has acquired the other 50% of Roc-A-Fella Records that it didn't own for just under $10M. In 1997, it paid $1.5M for a 50% stake in the hip-hop label, which has grown enormously and diversified into a bewildering number of business areas beyond recorded music.
Roc-A-Fella will now be absorbed into Island Def Jam where it will exist as an imprint. Roc-A-Fella's two key partners - Damon Dash and Jay-Z - are now free to go their separate ways, although the latter is said to be in negotiations for an executive post at Island Def Jam. Warner Music, however, has long been rumoured to be seeking to acquire his services. Dash may also work with Universal on a new partnership venture.
Source: www.nypost.com
KEVIN COYNES DIES AGED 60 07/12/04
Singer songwriter Kevin Coyne has died of lung fibrosis aged just 60. Once referred to as an "anti-star" due to his self effacing manner Coyne enjoyed cult success and an impressive career spanning thirty odd years. Beginning as a vocalist, Coyne signed to John Peel's Dandelion Records in the late sixties as a member of Siren. The group disbanded in 1972 but Coyne struck out with a solo album and gathered increasing support, especially in Germany. Coyne also developed a career as a painter in Northern Europe (he studied art at Derby School of Art between 1961 and 1965) and also wrote well received poetry in both English and German. He released 'The Adventures of Frank Randle' in 1995, 'Knocking On your Brain' in 1997 and 'Room Full of Fools' (2000) the latter two albums both featuring his sons Robert and Eugene. He leaves his sons and wife Julia.
INDIES CHALLENGE SONY-BMG MERGER 06/12/04
IMPALA , which represents Europes independent labels, has mounted a legal challenge to the BMG-Sony merger by launching a claim in the European Court of Justice (court of First Instance) in Luxembourg saying that the merger culd have legal, cultural and political and economic implications and that the European Commission, which passed the merger, made mistakes when considering the merger and the implications it will have on the market in sound recordings.
NAPSTER FOUNDER GOES LEGITIMATE 06/12/04
Shawn Fanning who founded the (now legal) Napster peer-2-peer file swapping and download platform has set up a new company, Snocap, to capitalise on the growng legitimate download market. His aim is to build an online community where users can legally swap songs. Playlouder.com already operate in this area with an online legal fileswapping service. Universal Music has said it will support Snocap and make material available for registration on the site. The site will have a process for payment for copyright owners.