Taxation of artists: income from copyrights is considered professional income

The Directorate General of Taxes (DGT) has clarified the fiscal nature of income obtained by visual artists, especially in the context of their transition toward retirement. The ruling analyzes how income derived from artistic creation and the exploitation of copyrights should be taxed when the main activity has ceased.

What the DGT has resolved

The binding ruling establishes that income obtained through the sale of works created by a visual artist is classified as income from economic activities of a professional nature. This consideration is not limited solely to the physical sale of the work, but extends directly to the income received from the assignment of copyrights for said production.

A fundamental aspect of the resolution is that the classification of this income as professional is independent of the continuity of the activity. The DGT points out that it is irrelevant whether, in the period in which the sale or the receipt of royalties occurs, the artist does not effectively carry out the artistic activity on a constant basis.

What it means for you

For visual artists and creators, this resolution determines the taxation route within Personal Income Tax (IRPF). The income will not be treated as income from movable capital, but as income from economic activities. This implies that, even if the professional is in retirement, the income that their previous works or the exploitation of their copyrights continue to generate will maintain its professional nature.

This distinction is relevant for the correct settlement of the tax, as the classification of professional activity entails specific tax obligations and treatments regulated by current regulations.

What should be done

Since the nature of this income depends on its link to the original artistic activity, it is necessary to analyze the source of each income stream. The application of Law 35/2006 and RD 439/2007 must be carried out with precision to ensure that the classification of the income is correct according to its origin. It is recommended to assess each particular situation to determine the appropriate tax treatment for copyrights and artwork sales at different stages of professional life.