Freelance activity or not? Marketing the usage rights of my compositions on the internet.
May 8, 2020 | 50,00 EUR | answered by Steuerberater Knut Christiansen
I am a freelance composer and in the future I would like to market my compositions on the web through an online marketplace (not a publisher) as well as my own newly created website.
There, I will offer instrumental music that I have composed and produced myself, so I own 100% of the copyrights.
Customers of the platform will receive my usage rights grant after payment (directly to me via PayPal) as well as a download of my composition in the form of recorded individual tracks of the music. (The recordings are just a means to an end, as the composition is not audible without them).
Customers can then create a new work with it, for example by adding vocals. I will always be credited as the author of my customers' new work, with a 50% share.
Do the earnings from this activity count as freelance income, even if I grant the rights thousands of times? I assume so, as I am not selling products but only granting the rights to use my artistic work. There is no sale taking place, as copyrights are not for sale.
Good day and thank you for using frag-einen.com!
I would like to answer your question as part of an initial consultation. Please note that this forum cannot replace personal advice. Therefore, only an initial tax assessment can be made, also in terms of fees. Liability cannot be assumed.
In general, the granting of copyright is not to be classified as a commercial activity if your compositions have a certain artistic level of design. However, this is generally assumed because you compose them individually. Also, you "sell" only your own works and do not trade in works of other artists. A commercial activity may occur in the case of an artist's mass-produced products. This includes, for example, the mass distribution of art prints (e.g. on posters) by a painter. Whether this is the case with you cannot be definitively assessed yet, because you do not produce your works in bulk, but only provide them for download once, and only grant copyright. In contrast to an art print, the composition does not belong to the end customer, but fundamentally still belongs to you. Therefore, it is generally assumed to be a freelance activity.
However, if absolute certainty is desired, you should request classification from your local tax office by presenting the facts in writing.
Kind regards
Knut Christiansen
Tax advisor
