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Campaign launched against Dutch ticket tax hike

A coalition of organisations in the Netherlands have launched a joint campaign against the government’s plans to raise the tax rate for the cultural and creative sector from 9% to 21%.

A full-page advert appeared in every national and regional newspaper today (3 June) with the message #nohigherebtw (nohigherVAT) on behalf of the alliance, which includes the Association of Dutch Music Venues and Festivals’ (VNPF), as well as other groups across culture, media, catering, books and sports.

It follows proposals unveiled by the country’s new right-wing government to increase the VAT rate for concert, festival, sports and museum tickets, as well as books, hotels and newspapers, by 12 percentage points from 2026. The sector contributes €26 billion (3.4%) annually to the Netherlands’ GDP and accounts for almost one in 20 jobs in the Netherlands.

A statement from the coalition reads: “The proposed increase in the VAT rate will inevitably lead to higher prices, which will put pressure on the accessibility and affordability of sports, media, books, culture and catering for the public. It affects everyone in the Netherlands in daily life and in several areas. It is an additional burden on the valuable free time, club life, curiosity and (mental) health of every Dutch person.”

The government says the increase will generate €2.2bn a year for the treasury, but campaigners say it will add 11% to the price of tickets. According to Dutch News, the measure is also the least popular of all the plans unveiled by the new coalition, with just over half of those polled opposed to the move and only 28% supporting it.

A total of 96% of respondents to a poll conducted by trade bodies Arts ’92 and The Creative Coalition said ticket prices will have to increase if the lower VAT rate is abolished, while research by economist René Goudriaan suggested the subsequent drop in visitors would most severely impact festivals (1.5 million fewer annual visits), resulting in €62.5 million less income.

“This increase in tax burden affects everyone: readers, festivalgoers, museum visitors, artists, musical fans, people who sing in choirs and play in brass bands,” says Arts ’92 director Astrid Weij. “In this way, what gives life colour and meaning takes a hit. The economy behind the creative sector is going to shrink. The effects on our prosperity, well-being and employment are negative.”

“The VAT increase is a serious setback for self-employed people and employees. Many fear forced layoffs”

“The proposed VAT increase is a blow to self-employed people and employees in the sector,” adds Thomas Drissen, director of The Creative Coalition. “It puts further pressure on the income of the makers. Many have not yet recovered from the corona years, when there was actually a professional ban. The VAT increase is a serious setback for self-employed people and employees. Many fear forced layoffs.”

Dutch live music association the VNPF has previously called on the authorities to reconsider the tax hike, warning it could have grave consequences for the domestic live music business.

“This measure makes ticket sales uncertain, leading to less investment in a sector that has already been hit disproportionately hard in recent years,” it said. “The jobs of more than 100,000 people working in this industry are also threatened.

“In addition, this VAT increase weakens the competitive position of the Dutch live music sector compared to neighbouring countries where low rates are still charged. Stages and festivals lose their offer to neighbouring countries, with all the financial consequences that entails. This policy puts the Dutch world-leading live sector at a great disadvantage.”

It continued: “Pop culture in the Netherlands is becoming less accessible, causing a broad audience to be excluded from cultural events. This makes the Netherlands less attractive for international artists, which has a negative impact on the business climate in this industry.

“The consequences extend beyond just the visitors – up-and-coming pop talent will find it even more difficult to break through and generate a sustainable income.”

Other groups to have signed up to the coalition include Dutch football association KNVB, the country’s top professional football league the Eredivisie, the Association of Theater and Concert Hall Directors (VSCD), Association of Event Makers (VVEM), the Alliance of Event Builders, the Association of Dutch Orchestras (VvNO), the Creative Industry Federation, the Culture Federation, the Pop Coalition and the Dutch Association of Journalists (NVJ).

 


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Dutch groups hit out at live music VAT rate hike

The Association of Dutch Music Venues and Festivals’ (VNPF) is calling on the government to reconsider its plans to raise the VAT rate for concert and festival tickets by 12 percentage points.

The increase from 9% to 21%, which is set to come into effect from 2026, was announced this week in the new coalition agreement between the PVV, VVD, NSC and BBB parties.

But the national live music trade body is warning the move could have dire consequences for the domestic business, and is appealing for talks with the powers that be.

“This measure makes ticket sales uncertain, leading to less investment in a sector that has already been hit disproportionately hard in recent years,” it says. “The jobs of more than 100,000 people working in this industry are also threatened.

“In addition, this VAT increase weakens the competitive position of the Dutch live music sector compared to neighbouring countries where low rates are still charged. Stages and festivals lose their offer to neighbouring countries, with all the financial consequences that entails. This policy puts the Dutch world-leading live sector at a great disadvantage.”

Stressing that a healthy cultural sector is “essential” for the country’s economy, the VNPF says the impact on the tax hike would be felt on and off the stage.

“The consequences extend beyond just the visitors – up-and-coming pop talent will find it even more difficult to break through and generate a sustainable income”

“Pop culture in the Netherlands is becoming less accessible, causing a broad audience to be excluded from cultural events,” it continues. “This makes the Netherlands less attractive for international artists, which has a negative impact on the business climate in this industry.

“The consequences extend beyond just the visitors – up-and-coming pop talent will find it even more difficult to break through and generate a sustainable income.”

The Association of Event Makers (VVEM) has also shared its “major concerns” at the proposal.

“This increase is bad news for consumers,” says the group. “A decision like this also has far-reaching consequences for Dutch artists, who see the gap with their audience growing, but also for entrepreneurs in the events industry.”

A four-party coalition deal was provisionally struck this week to form a right-wing government, almost six months after PVV leader Geert Wilders won the Dutch election.

“The VVEM suspects that the new government has not realised that a measure like this will hit ordinary Dutch people who like to go to events hard,” it adds. “The flywheel effect is that the business climate in the industry is also hit hard. We would like to enter into discussions with a new government to convince them not to take this measure.”

 


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The Touring Business Handbook 2024 out now

The Touring Business Handbook, a brand-new resource produced by IQ in association with Centtrip, is out now.

The first edition of the handbook features a wealth of advice and information from specialists in insurance, law, visas & immigration, accountancy & tax, performance royalties and currency exchange.

“With thousands of tours heading out each year, IQ wanted to produce a single publication, updated every year, containing as much practical information as possible to help artists and their teams as they plan to cross borders,” say editors Francine Gorman and Eamonn Forde.

“When we started planning this first edition of the Touring Business Handbook, it was hugely encouraging that so many of the professionals we approached said the same thing – that this was something sorely missing from the desks of those planning, budgeting, and building tours. So in this first edition, we’ve invited contributions from many of the world’s top experts, who have kindly taken time to put pen to paper.”

Contributors include Blacks Solicitors, Bullocks Touring, MSE Business Management, Viva La Visa, PACE Rights Management, Voly Group, Miller Insurance, International Theatre Institute, Schickhardt Rechtsanwälte and Russells.

Higginbotham Insurance Agency, CC Young & Co, All Arts Tax Advisers, mgr Weston Kay, International Theatre Institute, T&S Immigration Services, Gelfand Rennert & Feldman, Tysers Live, SRLV and Centtrip have also lent their expertise.

The Touring Business Handbook is available in print, digitally, and on this dedicated year-round mini-site. To purchase a print copy of the report, get in touch.

A preview version of The Touring Business Handbook 2024 is below.

 


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Spotify pulls out of French festivals over tax row

Spotify has announced it is withdrawing its financial support from two French festivals in response to a new tax imposed on streaming services in the country.

The so-called “streaming tax”, which comes into effect in 2024, was announced by president Emmanuel Macron’s government following “several months of consultation”, and will require subscription streaming platforms to make a contribution of 1.2% of their turnover in France.

The tax will directly finance France’s National Music Center (CNM), which was created in 2020 to support the wider music industry. Platforms that turnover less than €20 million a year will be exempt.

As a result of the proposal, Spotify says it will no longer support the Francofolies de La Rochelle and the Printemps de Bourges festivals from next year onwards.

“Following the announcement of the implementation of a tax on music streaming in France, we regret to announce that Spotify France will stop supporting the Francofolies de la Rochelle and the Printemps de Bourges, from 2024, financially and through activations on the ground,” says Spotify France MD Antoine Monin on X.

The CNM is currently funded by a 3.5% levy on ticket sales for shows, a contribution from the state to cover operating costs, and support from rights management organisations.

Monin says the Swedish streaming giant, which campaigned for a voluntary contribution instead of the tax, will focus its attention on emerging artist initiatives the Chantier and the iNOUïs, adding: “Other announcements will follow in 2024.”

“France does not encourage innovation and investment”

The announcement of the streaming tax, which is intended to generate €15 million next year, was welcomed by groups including French live association Prodiss, whose director Malika Séguineau described it as “the only device which allows the CNM to be provided with sustainable and balanced financing”.

“We are delighted that the government has taken this decision, supported by deputies and senators,” added Séguineau. “After long months of consultation and discussions, we must now look to the future, with a fully operational CNM from 2024 serving the ambition for the music industry.”

However, the move was criticised in a joint statement by giants Apple, Deezer, Meta, Spotify, YouTube and TikTok, which claimed they had reached an agreement to raise a voluntary contribution of more than €14m in 2025.

A Spotify spokesperson slammed the proposed tax as an “inequitable, unjust and disproportionate measure”, with Monin warning the firm would “disinvest in France and will invest in other markets”.

“France does not encourage innovation and investment,” he told Franceinfo. “France will no longer be a priority for Spotify.”

France is the world’s sixth largest recorded music market according to the IFPI, generating €920m in recorded music revenue in 2022.

 


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Malaysian trade body hits out over 25% tax rate

The coalition representing Malaysia’s live industry is calling for an urgent review of a 25% entertainment tax, which it claims could have “catastrophic economic consequences” for the business.

The Kuala Lumpur City Hall recently imposed the rate on all live events held in the city centre, causing “significant disruptions to both ongoing and forthcoming events” throughout the country.

Rizal Kamal, president of the Arts, Live Festival and Events Association (ALIFE), warns the move would lead to an escalation in ticket prices and place Malaysia at a disadvantage against its peers.

“A modern and consistent approach to taxation is essential to enable the industry to compete with its regional counterparts,” says Kamal, as per the New Straits Times.

“Singapore and Thailand impose zero entertainment tax but collect Goods and Services Tax and Value-Added Tax on tickets. Any rate higher than these countries’ tax structures would diminish KL’s competitiveness, resulting in the loss of international concerts.”

“We urge the government to conduct a comprehensive reassessment of the entertainment tax structure in KL”

Live events were previously exempt from the entertainment tax, which was introduced in 2001 and updated five years later. Kamal says the rate is “no longer aligned with the current socio-economic landscape” and represents an additional burden for promoters still recovering from the pandemic.

“We urge the government to conduct a comprehensive reassessment of the entertainment tax structure in KL,” he says. “Failure to do so could lead to event cancellations, substantial income loss for artistes, producers, venues, and workers, and damage our reputation as a business-friendly country.”

Kamal, who says ALIFE has been engaging with the authorities in a bid to address the issue, previously noted that the 25% tax ranks among the highest in the region.

“When combined with additional financial obligations such as a 15% withholding tax, a RM500 [€101] levy, and an additional bond mandated by the immigration department on artists, crew members and musicians, the cumulative fiscal burden becomes exceptionally demanding,” he said. “This is further exacerbated by elevated rental expenses for prominent venues.”

Earlier this year, ALIFE spoke out in support of Good Vibes Festival promoter Future Sound Asia amid the global outcry over The 1975’s aborted headline set.

 


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Renowned consultant Ed Grossman passes, aged 73

Ed Grossman, a renowned tax consultant to international touring artists, has passed away at the age of 73.

The London-born veteran was due to start chemotherapy for lung cancer this week but passed away suddenly yesterday morning (30 May).

Grossman’s employer at Brackman Chopra chartered accountants, Sunil Chopra, told IQ that he is “devastated and in shock”.

The pair started working together 33 years ago when they launched the music tax department at MGR chartered accountants in 1989.

Chopra left MGR to start his current company and Grossman joined him in 2015, clocking in seven years as a consult before his death.

“He is my adopted father,” Chopra tells IQ. “I am what I am in the music industry because of him. He taught me everything. He was the kind of guy you could go to with any problems – business or personal. He was the most genuine person I have ever known.

“I am what I am in the music industry because of him”

“Even if you have an argument, that doesn’t mean he’s thinking ill of you.He’s just having an argument because he wants to put a point across because he believes that he’s helping. He always wanted to help the clients. He brought life to the office – it is very quiet now.”

Martin Hopewell, founder of the International Live Music Conference (ILMC), also paid tribute to Grossman: “The ILMC just lost one of it’s longest-standing and best-loved members: the conference’s #1 food critic, poser of the most challenging, left-field questions and lover of a quick nap during the annual ‘autopsy’ session. He will be massively missed – the place just won’t be the same without him.”

Lionel Martin, a former business partner of Grossman, added: “[Grossman] was difficult to live with and difficult to live without but life will definitely involve less laughter without him in it.”

Martin says he first met Grossman in 1971, when he joined an accountancy firm in Oxford Circus called Goodman Myers Smith.

“The firm acted for the Rolling Stones and many other artists in the music industry,” Martin tells IQ. “At that time the newly moneyed industry was struggling to ‘work out the rules’. There were few better than Eddie to sort out the financial mess bands were making for themselves and I guess he went some way to teaching me and others how to do that.”

The pair left the firm by the mid-’70s and started our own firm called Grant Martin Grossman. “We were quite anti-establishment and had a firm logo which was a picture of a bowler hat, umbrella and galoshes (what were we thinking of),” Martin tells IQ. “After a few years, we disbanded the firm and Eddie went to work for a firm called Mercers Bryant.”

“There were few better than Eddie to sort out the financial mess bands were making for themselves”

In 1980, Martin started his own firm, MGR (previously Martin Greene), and three years later invited Grossman to join the company.

“He immediately became an important partner, looking after bands like Madness, Thompson Twins etc,” Martin continues. “We delivered some excellent work to our artist clients for many years and Eddie was at the helm in many of those cases. In around 2003/2004 Eddie switched over to handing international touring work representing big US bands touring Europe.

“He was eccentric to say the least, his passion for and insistence upon perfect work often resulted in friction in relationships but people who had the patience and intelligence to ‘stay with him’ know they benefited in many ways from their relationship with him and will miss him greatly. There have been several professional advisers substantially involved in regularising a fast expanding and financially chaotic music industry and I would definitely include Eddie in that list.”

Elsewhere, Claudio Trotta of Barley Arts in Italy wrote on Facebook: “We had so many great times together. You were a great professional resource of live entertainment and such a funny, lovely and nice man. A great and unique character.”

Geoff Ellis of DF Concerts in Scotland added that the news of Grossman’s passing is “very sad”.

Ed Grossman is survived by his wife Penny Grossman and their daughter Beth.

 


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Tax break for German nightclubs

Live performances by house and techno DJs have been officially recognised as ‘concerts’ by Germany’s Federal Fiscal Court, slashing the tax paid on live electronic music events to 7%.

Tickets for club nights were formerly levied at 19%, but are now eligible for the lower rate of sales tax after being redefined as “concert-like” events by the  Bundesfinanzhof (BFH).

In a judgment dated 23 July, but published in late October, the BFH affirms that “the performance of techno and house music by various DJs give[s] an event the character of a concert, or a concert-like, event even if the music performances take place regularly (weekly),” according to Berlin-based legal firm Härting.

The majority of dance music shows were formerly recognised as ‘party’, rather than cultural, events.

“Most clubs should be able to benefit from the application of the lower tax rate”

The reclassification for clubs throughout Germany follows a similar move specifically for Berlin’s Berghain in 2016, which was recognised as organising culture events and so eligible for the 7% rate of tax.

For nightclubs to benefit from the new tax rules, DJ performances must be the main purpose of the event (as opposed to dancing, partying and drinks sales), according to Härting.

“Even if these requirements have to be checked on a case-by-case basis, most clubs should be able to benefit from the application of the lower tax rate,” the firm says.

All venues and bars in Germany are currently closed under a nationwide lockdown set to run until the end of November.

 


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Going live on the right side of the law

The Covid-19 pandemic has caused the cancellation or postponement of the majority of concerts and live events, leading to an unprecedented crisis in the events and live music industry. In fact, although the streaming of music through dedicated platforms and apps has boosted the music industry in recent years, a great deal of an artist’s revenue still comes from live performances.

However, even during the months of lockdown, music did not stop, as the absence of live music events has stimulated artists and fans to reinvent the live concert experience by creating and supporting new platforms to discover, listen and share music while social distancing. The music industry has thus recently embraced new ways to encourage fan engagement by introducing the public to what could take the stage as the new normal for live events for a while: remote concerts and tours.

In this scenario, new legal challenges arise. Some of the most relevant issues concern the copyright protection of the works involved in streamed concerts, as well as the arrangement of the relevant compensations.

Firstly, the artist’s right to perform their copyrighted work in front of a public (whether in person or remotely) stands as one of the exclusive rights that a copyright owner is entitled to, along with the right to reproduce and distribute their work. But what if the concert is played by different artists, each from a different location and playing their own part and then synchronised to the moving images of each player or to different images? This is what happened, for instance, in the #Italiasuona flashmob recently organised by Filarmonica della Scala. The outcome of the performance will likely be considered a new audio-visual derivative work including a new live execution.

Thus, those who wish to share these kind of works with the public must check whether their new or existing agreements cover all the new normal rights (eg right of performance, right to communicate to the public through online means new executions of the same work, synchronisation rights over the concerned work). Not to mention the authorisation to use the image rights of each performer and share the content by each performer to maximise the audience.

The most important concern is making sure the livestreaming platforms involved only use authorised content

Further, such rights might run the risk of being infringed: the most important concern will be to make sure the livestreaming platforms involved only use authorised content in each online event. In this regard, some online music platforms and social networks have already been provided with algorithms which are able to automatically detect copyrighted music. Further, making the same performances of an artist available on demand, and thus on a continuous basis, would also involve the need to establish licences from right-holders, as well as licences related to synchronisation, in case videos are involved during the streamed events.

The compensation of artists and staff operating in the live industry is another crucial point of change for the future, which also needs to be taken into account in agreements. In this regard, although a different experience from the usual live concert atmosphere could justify a lower price for each single ticket sold, the online-based approach of such events will undoubtedly profit from a much wider and more diverse reach.

In this new era, the compensation of artists and staff has to be scrutinised under a different – and more digital – tax approach.

In principle, the OECD Model Tax Convention emphasises the need to assess the existence of a close connection between the income and the performance. Such a connection will generally be found to exist where it cannot be reasonably considered that the income would have been derived in the absence of a performance of these activities. The right to receive a remuneration for musicians and artists is strictly connected to their exhibitions.

These issues are high on the agenda of international music managers and artists, as well as tax professionals and authorities.

In this new era, the compensation of artists and staff has to be scrutinised under a different, more digital, tax approach

A recent case involved the analysis of tax treatment of income received by two musicians (tax residents of Germany and Switzerland) engaged by an Italian foundation to perform at two concerts outside of Italy.

According to the agreement concluded between the foundation and the international artists, though remuneration was due in connection with the participation in the concerts outside of Italy, all preparatory activities, such as concert rehearsals, had to be carried in Italy and no specific remuneration – nor a reimbursement of the expenses – was due.

The Italian tax authorities’ view can be summarised as follows: the income paid to the musicians is treated as income from artistic performance carried out entirely outside the Italian territory, regardless of the days present in Italy for concert rehearsals. Therefore, such income is not subject to Italian taxation in the hands of the non-resident musicians. As a matter of fact, concert rehearsals carried out in Italy should not be treated as separate activities from the concert (they are an essential part of it). The conclusion appears consistent with the clarifications provided in the OECD commentary on article 17 of the aforementioned model.

What about the legal and tax issues of compensation deriving from the streaming platforms? These issues might need to be explored more in detail, in light of the new key role of the digital tools for the live industry, especially in the case of concerts involving renowned international artists. Possible means to be considered to assess compensation include earnings calculators, which are unofficial tools already used by influencers, providing earning potential guidelines by taking into account the number of interactions, followers and reach of the shared content.

 


Antonio Longo and Elena Varese are lawyers in the Milan office of DLA Piper, a global legal firm. This article originally appeared on the DLA Piper website.

This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.

Professional esports is taxing

Esports are taking off in Latin America, with the recent creation of national leagues in Chile, Peru, Argentina, Mexico and Colombia. Rapid growth has also seen TV Azteca, a Mexican TV channel, acquire a sports production company with the aim of launching a 24 hour esports channel.

As ever with new technologies, regulation must work hard to keep up with developments. How are tax regimes dealing with the new business models and income streams generated by the boom in esports? We take a look at the tax rules for esports players and industry participants in Colombia, Chile, Mexico and Peru.

Chile has established itself as one of the key LatAm hubs for the industry

Chile
The esports community is becoming increasingly important in Chile as the country establishes itself as one of the key LatAm hubs for the industry. Riot Games recently announced that the Latin America North and South Leagues will merge to form the new Latin American League, based in Santiago de Chile, which will also be the host city for the League of Legends Latin America final.

Professional gamers are profiting from new forms of compensation, including gifts, sponsorship and money earned through publicity on YouTube channels. Some have achieved ‘influencer’ status on streaming channels and are attracting attention from companies keen to exploit lucrative marketing opportunities.

The Chilean Tax Administration has taken steps to address the related tax implications. It is focusing its efforts on the digital economy, and has recently launched the Tax Compliance Plan 2019. This centres on tax avoidance business models such as base erosion and profit shifting, with the aim of creating a level playing field for all participants.

Chile’s Tax Administration also announced that income earned by influencers (which includes professional gamers) will be taxed according to general taxation rules (ie a progressive tax rate up to 35%). Failure to comply may lead to an audit and possible monetary fines.

Currently, there is a digital economy tax bill under discussion in the Chilean Congress, but it remains to be seen if this will extend to cover all aspects of the digital economy, including esports.

Colombia’s esports ecosystem is thriving

Colombia
Colombia’s esports ecosystem is thriving. Last year saw the introduction of the Professional Videogame League’s ‘Golden League’ into Colombia. More and more professional gamers are now looking to Bogotá, which was recently chosen as the headquarters for the Movistar Latin American League of Legends competition, organised by Telefónica and Riot Games.

Despite this, the Sports Leadership and Positioning Organisation in Colombia does not recognise esports as a “sport”. Because most players have an employment contract or some other contractual obligation to provide their services, its players are not treated differently for tax purposes. Unlike in other jurisdictions, the Colombian Tax Authority has yet to issue any regulation differentiating professional gamer income, including sponsorship money, from more conventional earnings.

Taxation rules are the same for players as for any other citizen paying income tax, and if the professional gamer earns additional income through tournament victories, those earnings are subject to prize taxation rules.

There is no fiscal category for esports under existing tax legislation

Mexico
Mexico’s esports sector has huge potential. Earlier this year, the Mexican Federation of Esports was formally recognised as a sports federation by Mexico’s sports regulator, giving esports official, legal status as a “sport”.

In November 2019, Mexico City will host the first Central America and Caribbean Esports Championship, with the participation of the PanAmerican Esports Confederation and the World Esport Consortium. It will be the first esports tournament in the region to offer sports medals to the winners.

In Mexico, players are typically paid by their teams under a “provision of services contract”, with the players either issuing invoices to their teams or hired as an employee and paid a salary. In both scenarios, players are subject to income tax at the normal rate of 36%, with players responsible for their own tax filings if paid under a services contract.

The age of the player can impact the approach taken. Players under 16 years old face challenges registering with the Mexican Tax Administration, and players aged 16–18 may currently only register under salary schemes.

There is no fiscal category for esports under existing tax legislation. As a result, teams currently prefer services contracts, easing the administrative burden of their tax filings. All stakeholders must match their activities and revenue streams to the most appropriate existing tax code – whether for income derived from marketing, sponsorship or prize money – in order to ensure proper compliance.

Esports is still not considered to be a sport in Peru

Peru
The 2017 creation of the Peruvian Association of Electronic Sports and Videogames (APDEV), which promotes the professionalisation of esports, was a significant step for Peru’s esports sector. Companies such as Claro and Riot Games have launched esports tournaments, allowing different brands to be directly involved in the Peruvian esports ecosystem. Nevertheless, esports is still not considered to be a sport in Peru.

Currently, gamers are mostly hired under provision of services agreements for esports competitions. Their income generally consists of payments for their services as professional gamers, prizes divided between all team members, or payment of their travel and accommodation expenses. Players may also receive income as streaming casters, influencers or through event appearance fees.

As players are not currently subject to specific tax regulations, their services do not have a specific tax category. Payments and prizes earned through their participation in competitions may therefore qualify as independent personal services income with a withholding tax rate of 8%. Tax collected may be considered by the taxpayers as part of their annual work income tax, which is subject to progressive rates from 8% to 30%.

In 2017, the Peruvian Tax Court issued a decision which categorised income obtained through sale of advertising space on a blogger’s website as third category income, with a withholding rate of 29.5%. If a professional gamer wants to sell advertising space as the owner of a website, any income obtained from that source (e.g. sponsorship, influencers) may be similarly considered as third category income, but there have been no test cases as yet.

With the popularity of esports growing at a significant pace in Latin America, legislators face the difficult task of ensuring that regulations are suitable for such an important and lucrative market. Stakeholders can expect to see the authorities working together with key esports organisations to make the new rules appropriate for all.

 


The nine authors of this article are lawyers at CMS Latin America, and include Cecilia Del Pilar Kahn and Cesar Davila, associates at CMS Grau in Peru, and Diego Rodríguez, partner at CMS Carey & Allende. It originally appeared on the CMS website.

Outdoor entertainment tax threatens Glasgow festivals

Geoff Ellis, chief executive of Scottish promoter DF Concerts, has warned Glasgow City Council that he may move flagship Glasgow event Trnsmt festival (50,000-cap.) out of the city, if a new tax on outdoor entertainment comes into force.

Council leaders voted to introduce a new concert ticket tax to raise money for the council’s budget and balance the toll taken by big events on the city’s parks. The levy would result in an additional charge of £2.50 to each ticket.

The council says that the tax would raise £650,000 a year from events such as Trnsmt, which debuted in 2017 and takes place on the weekend formerly occupied by T in the Park, Glasgow Summer Sessions (35,000-cap.) and Kelvingrove Summer Nights (2,500-cap.), with £150,000 dedicated to the upkeep of the city’s green spaces.

Ellis of DF Concerts calls the levy “well-meaning, but ill-conceived and short-sighted”.

Ellis says he now has “some difficult decisions to make” concerning the outdoor events that he runs in the city. The DF Concerts boss states that his events generated an economic impact of more than £10 million last year.

“Quite simply we are now accelerating towards the cliff edge in terms of outdoor events in this city,” Ellis told the Evening Times.

“Quite simply we are now accelerating towards the cliff edge in terms of outdoor events in this city”

“It is of concern to me that promoters and other event organisers will now be encouraged to start events in other cities knowing that our ability to attract strong artistic talent to Glasgow is compromised by hundreds of thousands of pounds per event,” states Ellis. “I now have to decide whether to lead or follow in that respect.”

As long as they put this tax in place, Glasgow’s going to suffer and it will be to the benefit of other cities,” adds Ellis, mentioning that cities such as Stirling and Dundee “are very keen for us to make use of their assets and the rental prices they’re offering us are far less than Glasgow.”

A spokesperson from the Glasgow City Council comments: “The public has told us how much they value our green spaces and how they would like to see a more direct connection between the events we host and income being invested back into our parks.

“The environmental levy is about striking an appropriate balance between supporting our green spaces and using parks to host large events,” adds the spokesperson.

According to the Trnsmt promoter, event organisers already pay “substantial environmental maintenance sums” for the use of greenfield spaces.

Trnsmt returns to Glasgow Green this year from 12 to 14 July. The three-day festival will see performances from Stormzy, Catfish and the Bottlemen, George Ezra, Snow Patrol and Jess Glynne.

 


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