Germany’s social security system

The artists’ social security insurance is a special part of the Germany’s social security system. The system applies for self-employed artists and publicists. Publicists in this sense are for example journalists. The system is financed one half through contributions of artists or publicists and by the other half through subsidies from the Federal Government and by companies, institutions, associations, or public organisations who utilize any artistic or written works created by self-employed persons.

Self-employed persons in the sense of the artists’ scheme are for example actors, art directors, ballet dancers, cartoonists, choreographers, comedians, commercial photographers, correspondents, designers, editors, filmmakers, graphic designers, journalists, musicians, poets, producers, reporters, and translators. Self-employed artists and publicists may also be liable to pay contributions if they use or market the artistic or written works or services of third parties. Agents or managers are liable to the levy of artists which they represent under certain conditions.

There are three kinds of companies, institutions, associations, or organisations who can become liable to pay the artists’ social security levy. (i) The first group are companies and organisations who typically engage artists and publicists such as press agencies, theatre, orchestras, radio and television providers, galleries, art traders, advertising agencies, museums, and educational institutes for artistic or written work. (ii) The second group are companies who are engaging artists or publicists on more than an occasional basis, use their work or writing for their business activities and realise income through this work or writing. Occasional means not more than three events or occasions and the fee for each event or occasion does not exceed 450 Euros in a calendar year. (iii) Companies and other entities who engage artists and writers for own marketing purposes on more than an occasional basis are also liable to the levy. Occasional are orders if the fee does not exceed 450 Euros in a calendar year.

The levy rate for 2022 is 4.2%. All payments of a customer to a self-employed artist or publicist are multiplied by the levy rate. This includes also reimbursed costs e.g., for materials, transport, or telecommunication. Not included are the separately charged VAT or tax-free compensations. All companies who work with artists or publicists and who are liable to the levy must register with the Artists’ social security funds (Künstlersozialkasse). All remuneration including expenses and ancillary costs must be reported on a yearly basis by 31 March of the following year.

The Artists’ social security funds or the Federal pension insurance association (Deutsche Rentenversicherung Bund) carry out audits. Unreported levies can be claimed up to 6 years after the event and on special occasions up to 30 years.

International aspects

Artistic works or other artistic achievements are only subject to the artists’ social insurance if the work, performance, or activity is performed or utilized in Germany. Companies who have no seat in Germany are not liable to the levy. This is also the case is if the work or achievement is carried out in Germany.

There are triangular arrangements where special rules apply. The following example shows how far reaching the Artists’ social security liability can be:

A German promoter organises and arranges a tour of the Russian national ballet in Italy. The choreography and artistic execution are developed in Russia. The Russian ballet company or the Italian opera are not liable to the levy. The German promoter will be liable to the levy if there is the possibility that the production which was developed abroad will be performed in Germany. The pure possibility is sufficient. This ruled the Federal Social Court in 2008.

Autor: Peter Scheller, Steuerberater, Master of International Taxation, Fachberater für Zölle und Verbrauchsteuern