📌 Introduction
Copyrights are subject to withholding tax or VAT, depending on the type of entity (legal or natural person). The withholding rates vary depending on the country of residence of the entity.
Below you will find all the information on withholding tax, VAT, tax certificates, and ways to reduce taxation.
1️⃣ Taxation for Authors residing in Italy
✔ Authors with tax residence in Italy are subject to withholding tax on royalty compensation, with different rates based on age:
🔹 If you are 35 years or older → Withholding tax of 20% on 75% of the accrued amount.
🔹 If you are under 35 → Withholding tax of 20% on 60% of the accrued amount.
📌 Practical example:
If an Author 35 years or older has accrued 100 euros in royalties:
The taxable amount will be 75 euros.
The withholding applied will be 20% on 75 euros = 15 euros.
The net amount received will be 85 euros.
📌 Note: The withholding is applied directly by Soundreef before the royalty payment is credited.
2️⃣ Taxation for Authors not residing in Italy
✔ For Authors with tax residence outside Italy, the standard withholding tax is 30% on the total accrued royalties.
✔ It is possible to reduce this percentage by uploading an updated Tax Residence Certificate for the current fiscal year.
📌 How to reduce the withholding tax?
The certificate must be issued by the Competent Authorities of the country of residence.
It must be in English (or accompanied by an official and certified translation in English).
It must be uploaded before completing the Check-Out in the Payments > Payment Information > Tax Profile section.
📌 Note: The reduction of the withholding depends on the tax agreements between the country of residence and Italy.
3️⃣ Taxation for Publishers
🔹 If the publishing company is based in Italy
✔ VAT at 22% will be applied, and not the withholding tax.
🔹 If the publishing company is based outside Italy
✔ A withholding tax of 30% on the accrued amount will be applied.
✔ In this case as well, it is possible to reduce the taxation by uploading a Tax Residence Certificate.
📌 Where to upload the Tax Residence Certificate?
Access the Payments > Payment Information > Tax Profile section.
Upload the document in the required format.
4️⃣ Where to find billing information?
✔ Billing information is always available in the Payments > Payment Information section.
✔ If you are a Publisher, before issuing the electronic invoice, ensure that the amounts match those indicated in your account.
📌 Note: Invoices containing errors or missing data may be rejected, thus delaying payment processing.
📌 FAQ
❓ If I am under 35, what will the withholding tax on my royalties be?
✔ Authors under 35 pay a withholding tax of 20% only on 60% of the accrued amount, instead of 75%.
❓ I have tax residence outside Italy. What happens if I don't upload the Tax Residence Certificate?
✔ If you don't upload the certificate, the withholding tax will be applied at 30% on the accrued royalties, without any reduction.
❓ Where can I find the data for my Publisher invoice?
✔ You can find the billing information in the Payments > Payment Information section.
📌 Conclusion
Royalties accrued on Soundreef are subject to withholding tax and VAT, depending on the entity (natural or legal person) and the tax residence of the Author or Publisher. It is possible to reduce the withholding tax on royalties by uploading an updated Tax Residence Certificate.