Copyright: the NSSO brings precisions

The NSSO has recently published new Instructions for Employers regarding the new social treatment of the allowances for the transfer of copyright and neighbouring rights. It specifies and brings light to 2 specific situations.

We invite you to consult our Infoflash of 4 May 2023 for more details about the new social legislation regarding the allowance for transfer of copyright and neighbouring rights, which has entered into force on 1st January 2023.

Allowance allocated in replacement or in conversion of remuneration

Principle

As of 1st January 2023, an allowance for the transfer of copyright and neighbouring rights allocated as a replacement for or to convert remuneration, bonuses, benefits-in-kind or any other benefit or supplement to the above, whether or not subject to NSSO contributions, cannot benefit from the non liability to the NSSO.

Exception

Nevertheless, the legislation provides for an exception to that ban on conversion of remuneration (cf. our Infoflash of 4 May 2023). The NSSO now specifies how to interpret it and the procedure to follow in order to respect the legal provisions.

An allowance for the transfer of copyright and neighbouring rights allocated before the 1st January 2023 as a replacement for or to convert remuneration, and declared to the NSSO as remuneration (remuneration code 01) can benefit from the non liability to the NSSO (remuneration code 47) as from the 1st January 2023 if the following conditions are met:

1. Declaration for personal income tax calculation as income from movable property

This allowance has been declared for personal income tax calculation as income from movable property for the taxable period of 2022 (or 2021, 2020, 2019 or 2018 in case of regularisation).

2. Communication to the NSSO

You must communicate to the NSSO, before the 31st December 2023, the amount of the allowance for transfer of copyright and neighbouring rights (= maximum amount to be converted).

Amount to be communicated to the NSSO?

The amount to be communicated is the amount of 2022. If there isn’t any, the amount to be communicated is the one of 2021, 2020, 2019 or 2018.

If the amount of 2022 (or of the last year during which an allowance for copyright and neighbouring rights has been allocated) is smaller than the average of the allowances for copyright and neighbouring rights of the last 5 years (2018-2022), the NSSO allows you to communicate that average as maximum amount to be converted. The aim is to prevent too big a difference with the amount of the previous year to affect the situation.

How to communicate that amount to the NSSO?

The NSSO has created a specific app to allow you to communicate that amount. You will find it here.

Please do not hesitate to contact your payroll consultant if necessary.

For all of your employees?

The communication of this amount is not mandatory if, as of 1st January 2023, you no longer allocate an allowance for copyright and neighbouring rights. The purpose of that communication is to justify, in case of control, that the apparent salary difference due to the fact that the allowance for copyright and neighbouring rights liable to the NSSO before the 1st January 2023 meets the conditions to no longer be liable as of the 1st January 2023.

Furthermore, this communication is required only for the employees who have received, during the 2018-2022 period, an allowance for copyrights pursuant to salary agreements concluded at that moment and which remain unchanged.

3. Compliance with the general conditions regarding non liability

The allowance meets the general conditions in order to benefit from the non liability (cf. our Infoflash of 4 May 2023):

1. During the period of 4 quarters of the civil year, the amount allocated as allowance for the transfer or licensing of copyrights and neighbouring rights equals to at least 30% of the sum of:
   • the total amount of the concerned employee's remuneration which is liable to the NSSO
   • AND the total amount of allowances allocated for the transfer or the licensing of the copyrights and neighbouring rights.
2. As much the remuneration as the allowance for copyright and neighbouring rights are determined in accordance with the market. The employer holds at the disposal of the NSSO the supporting documents regarding the different elements of assessment.
3. The amount of the allowance for copyright and neighbouring rights is indicated in the DmfA of the quarter during which the allowance is allocated (remuneration code 47).

Regularisation in the past

If you have allocated an allowance for copyright and neighbouring rights between 2018 and 2022, have wrongfully not declared it to the NSSO, but have declared it for personal income tax calculation as income from movable property, the legislation allows you to put your situation in order without having to pay social security contributions, increases in contribution or interests on arrears on that allowance. It is therefore an amnesty (cf. our infoflash of 4 May 2023).

In its recent Instructions for Employers, the NSSO insists on the fact that this amnesty applies only if you proceed to that regularisation before the 31st December 2023 via a correction of your concerned DmfA. This regularisation is possible for all of your employees, even for those who are no longer working in your company as from 2023, who no longer receive an allowance for copyright and neighbouring rights as from the 1st January 2023 or if your company no longer exists or employs personnel.

The legislation offers you the possibility to make a regularisation. This is not mandatory. However, as from the 1st January 2024, in case of NSSO control on those allowances, if those allowances have wrongly not been declared between 2018 and 2022, have not been regularised before the 31st December 2023 but have been declared at tax level as movable income, the NSSO specifies that social security contributions will be requested from you. Amnesty will no longer be effective.

Source: Intermediate NSSO instructions 02/10/2023 www.socialsecurity.be