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Artist Social Security

Interposition of third parties

In principle, the obligation to pay the levy presupposes the direct payment of remuneration to an artist working on a self-employed basis. If an artistic service is performed on behalf of an assessable enterprise but the artist receives its remuneration from a domestic third party, then the latter must be exclusively regarded as the entity liable to levy in its capacity as the artist’s contractual partner.

However, if the interposed company is a foreign enterprise (a domestic organizer that does not pay the artist directly but rather pays an interposed foreign tour organizer) the KSK assumes that the foreign company itself is not liable to levy and accordingly treats the domestic user as the entity liable to levy pursuant to section 25, paragraph 1, sentence 2 KSVG. Since the sum paid by the latter to the interposed enterprise is generally higher that the remuneration paid by the third party to the artist, in this case, the assessment basis for the levy is the amount that the artist receives for his artistic activities. In practice, the problem that arises in such cases is that the domestic user does not usually know what this amount is nor does it receive any information from its contractual partner. If the contractual partner with a duty to notify (e.g. a domestic organizer) is unable to assess the amount paid in remuneration to the artist (e.g. because the foreign production company provides no information in this respect in order to avoid disclosing its calculation basis) the KSK links the amount payable in levy to the contract’s form:



1) In principle, the KSK assumes that any certificate E-101[1] submitted by the foreign user, in which the artist’s country of residence recognizes the artist’s status as a dependent employee has no effect with regard to activities carried out in Germany. Accordingly in such cases, it treats the artist as a self-employed entrepreneur.

2) If the interposed foreign enterprise acts ‘for the services of’, the KSK assumes that the foreign company simply acts as a deputizing intermediary for the artist and that ultimately, the contractual partner is the artist himself. In this case, it regards all the fees paid to the third parties as remuneration for an artistic service rendered on an independent basis. Any sums paid in remuneration to artists (employees) employed in a dependent employment relationship are likewise not included in the assessment basis. Only reference to German law is made when it comes to deciding whether an artist is working in a dependent employment relationship or is self-employed. Above all, this evaluation does not solely depend on the wording of the contracts; rather the definitive criterion is examination of the actual circumstances. The existence of a dependent employment relationship should as a rule be assumed if the artist in question receives instructions from the contractual partner and is integrated in its organizational operations.



3) If the interposed foreign company is the direct contractual partner of the domestic user and the latter is unable to assess the remuneration paid to the artist, the KSK assesses the levy liability by referring to the figure of 25% of the gross proceeds from ticket sales, merchandising etc. It reserves the right to estimate a higher figure if there are indications in this respect. Naturally, in such cases the levy will be very often much higher than would have been the case had reference been made to the remuneration actually paid to the artist and so this option has to date hardly been used. In addition, it is questionable whether this method would withstand legal scrutiny.

In practice, the method that has prevailed in case of collaboration between a domestic user and a foreign third party acting as an intermediary between the domestic user and the artist is that the domestic user invoices its contractual partner for the levy as a cost to be borne by the latter. The question of which sum should be used as an assessment basis (the remuneration paid by the domestic user or the artist’s fee paid by the third party to the artist) usually depends on the openness and mutual trust of the contractual partners.
  [1] Certificate pursuant to article 11, paragraph 1, letter a of Order (EEC) 574/72 issued by the Council dated 21 March 1972 regulating implementation of Order 1408/71, in the version of Order 2001/83 issued by the Council on 2 June 1983 or Order (EEC) 2195/91 issued by the Council on 25 June 1991, AB1 L 206,2, whichever applies.
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