Tweet
As artistes valiantly try to dodge the taxman, ironically, many of them are forgoing millions owed to them as taxable returns by international governments.
Unfortunately, this practice robs the country of income and defeats, in part, the purpose of bilateral treaties designed to give tax breaks.
"You cannot blame the governments because it is there for the artistes to claim. But they don't. And it is a whole lot of money," said Kingy, manager of mega star Shaggy and Christopher Martin. "Yes, man. It is in the millions."
When an artiste performs overseas, up to 30 per cent of his/her earnings is withheld by foreign countries. But most of that amount can be reclaimed under Jamaica's bilateral agreements with the US, UK, Canada, Norway, Sweden, Denmark, Germany, Switzerland, Israel, China, France, and Caricom.
"In these countries, artistes are relieved from double taxation. It means that artistes who earn incomes in these countries pay tax on overseas income in one of the two countries, but not usually in both," said Nadia McDowell Williams, tax help specialist of the Tax Administration Services Department. "It is an agreement to avoid paying tax on the same income twice."
The agreement varies from country to country as to whether the tax is paid in the country where it was earned or the country of residence. For the US, in order to reclaim that amount, an artiste or manager needs US tax identification. But some are unwilling or unaware of steps to attain the ID said Christopher Edmonds vice-chairman of RIAJAM (Recording Industry Association of Jamaica).
"You can claim treaty benefits but you need a tax payer's ID... A lot of people, by virtue of not getting the tax number, are giving up 30 per cent," said Edmonds who is also president of Rebelmix Inc, an online music distributor. "If you are a registered company it can take 10 minutes to get... if you are an individual... two to four weeks. But a lot of artistes may be scared when they look at the forms. A lot of artistes may not have the business sense, or managers to deal with it."
But there is also the view that some artistes are ignorant of this available income.
"Some artistes know about this [agreements] and others don't. Our system is not sufficient with knowledge in terms of business. Its something you have to find out for yourself," said singer/songwriter Angel Shalone who tours with Buju Banton. "In the US, you are supposed to be paying taxes, some do but many don't. Organisers do it differently, some organisers deal with it for you. Others say you have to deal with it yourself. So you have to find an accountant firm to tally your earning."
Informal artistes tend to ask for cash, as it removes a paper trail. But for those who can't remove paper trails, they attempt to hike fees, in order to reduce the claimable amount. There are "ways and means around" taxes voiced Nicole Brown of Imagine.Entertainment, a booking agency.
"If an artiste's fee is say [X amount], they bill the production costs and airfare so that the amount taxable for the artiste is not so burdensome."
In other words, the bill is padded with expenses so that the net income is small and reduces taxes.
"Its just like in Jamaica," she quipped. "So maybe some artistes are losing but maybe not much. It all depends."
Unfortunately, Japan, a popular country for reggae, is not a part of the agreement. It means that income is subject to double taxation.
"I think the Asian countries should join in, because it is unfair for artistes to be taxed and taxed again. A double taxation is a hindrance to the artiste when you think of the final figure that they take home," said Kingy.
Shaggy recently returned from touring Europe and Africa - a continent not a part of the agreement. Again, there are ways around it. Rebel Mix registers its company in the US which apparently has an agreement with Japan. "A lot of the payment of royalties are re-routed to Jamaica legally. We get paid from international entities in the US," Kingy explained.
Spain was the latest country to join Jamaica with a double taxation exemption agreement, and others are likely to follow.
"But I doubt that many artistes are making use of it," sighed Brown.
http://www.jamaicaobserver.com/lifes...KNOWING_IT.asp
Unfortunately, this practice robs the country of income and defeats, in part, the purpose of bilateral treaties designed to give tax breaks.
"You cannot blame the governments because it is there for the artistes to claim. But they don't. And it is a whole lot of money," said Kingy, manager of mega star Shaggy and Christopher Martin. "Yes, man. It is in the millions."
When an artiste performs overseas, up to 30 per cent of his/her earnings is withheld by foreign countries. But most of that amount can be reclaimed under Jamaica's bilateral agreements with the US, UK, Canada, Norway, Sweden, Denmark, Germany, Switzerland, Israel, China, France, and Caricom.
"In these countries, artistes are relieved from double taxation. It means that artistes who earn incomes in these countries pay tax on overseas income in one of the two countries, but not usually in both," said Nadia McDowell Williams, tax help specialist of the Tax Administration Services Department. "It is an agreement to avoid paying tax on the same income twice."
The agreement varies from country to country as to whether the tax is paid in the country where it was earned or the country of residence. For the US, in order to reclaim that amount, an artiste or manager needs US tax identification. But some are unwilling or unaware of steps to attain the ID said Christopher Edmonds vice-chairman of RIAJAM (Recording Industry Association of Jamaica).
"You can claim treaty benefits but you need a tax payer's ID... A lot of people, by virtue of not getting the tax number, are giving up 30 per cent," said Edmonds who is also president of Rebelmix Inc, an online music distributor. "If you are a registered company it can take 10 minutes to get... if you are an individual... two to four weeks. But a lot of artistes may be scared when they look at the forms. A lot of artistes may not have the business sense, or managers to deal with it."
But there is also the view that some artistes are ignorant of this available income.
"Some artistes know about this [agreements] and others don't. Our system is not sufficient with knowledge in terms of business. Its something you have to find out for yourself," said singer/songwriter Angel Shalone who tours with Buju Banton. "In the US, you are supposed to be paying taxes, some do but many don't. Organisers do it differently, some organisers deal with it for you. Others say you have to deal with it yourself. So you have to find an accountant firm to tally your earning."
Informal artistes tend to ask for cash, as it removes a paper trail. But for those who can't remove paper trails, they attempt to hike fees, in order to reduce the claimable amount. There are "ways and means around" taxes voiced Nicole Brown of Imagine.Entertainment, a booking agency.
"If an artiste's fee is say [X amount], they bill the production costs and airfare so that the amount taxable for the artiste is not so burdensome."
In other words, the bill is padded with expenses so that the net income is small and reduces taxes.
"Its just like in Jamaica," she quipped. "So maybe some artistes are losing but maybe not much. It all depends."
Unfortunately, Japan, a popular country for reggae, is not a part of the agreement. It means that income is subject to double taxation.
"I think the Asian countries should join in, because it is unfair for artistes to be taxed and taxed again. A double taxation is a hindrance to the artiste when you think of the final figure that they take home," said Kingy.
Shaggy recently returned from touring Europe and Africa - a continent not a part of the agreement. Again, there are ways around it. Rebel Mix registers its company in the US which apparently has an agreement with Japan. "A lot of the payment of royalties are re-routed to Jamaica legally. We get paid from international entities in the US," Kingy explained.
Spain was the latest country to join Jamaica with a double taxation exemption agreement, and others are likely to follow.
"But I doubt that many artistes are making use of it," sighed Brown.
http://www.jamaicaobserver.com/lifes...KNOWING_IT.asp
Comment