By head of secretariat Klaus Pedersen, Association of Visual Artists, The visual artist #2 2023
In recent years, SKAT has adopted a new practice in its view of who is covered by the concept of 'fee recipients' in the tax system. This concerns, for example, artists who have not created their own CVR number or who do not have a large income from their artistic work.
Fee recipients are typically defined as persons who receive income in the form of B income, and where the income is not part of an employment relationship. Furthermore, emphasis is placed on the fact that the income has not been earned through sales or similar activities, and that there has been no financial risk in connection with receiving the fee.
An artist who receives the status of fee recipient in the tax system typically loses a number of opportunities to be able to deduct all the expenses linked to one's artistic work.
In a decision from SKAT in January 2023, an artist has been considered a fee recipient and has been required to pay full tax on a production grant from the Statens Kunstfond. The grant was received in December 2021 and was to be used, among other things, to pay for the production of new works for an exhibition in 2022.
SKAT believed that only expenses incurred in the same tax year as the grant was received, i.e. 2021, could be included as tax deductions. And since expenses for the exhibition had been incurred in 2022, the artist could therefore not offset his expenses for the exhibition against his grant income.
BKF believes that it is a wrong decision, and has therefore chosen to support the artist in an appeal.
We have also learned that, unfortunately, it is not a lone swallow. Other artists who run into the same problem are very welcome to contact BKF for advice and possible appeal of the decision.