Often, an artist or professional transfers their copyright in exchange for some form of compensation from the purchaser. Like any other income, in principle, this income is subject to personal income tax (IRPF) if the transferor is a taxpayer subject to this tax.
How can copyright be considered?
What makes this type of income unique is that it can be considered either income from employment or
economic activities. Specifically:
- • Income from work would include income derived from the creation of literary, artistic, or scientific works, provided that the right to exploit them is transferred.
- • Income from economic activities would be considered as such when it involves the self-directed management of means of production and/or human resources for the purpose of participating in the production or distribution of goods and services.
It is important to be clear about the type of income to which this transfer of copyright applies in each specific case, among other reasons because classifying this income as one type or another would entail the obligation to withhold tax under one provision of the tax regulations or another, to issue invoices or not, whether or not expenses can be deducted, etc.
Therefore, artists and creators must ensure that they are handling this type of income correctly for tax purposes to avoid problems with the tax authorities and to keep their “tax bill” as low as possible.
