Ladies, or perhaps just girls, have found a passion for singing, acting and painting, and would like to develop their talent to the full. But they wonder how to go about it. Do they have to find a suitable job so that their art can earn them a living? Or can they carry out this artistic activity outside an employment relationship as well? For them, and for all other female artists, we bring a guide on how to earn a living from your work „on your own“.
Form of business
For female artists there are actually several options for making a profit from their artistic performance. It mainly comes down to the extent and form in which they want to give their artistic performance, or the mode of creation in which they want to create their works.
Performing artists
Zora has decided that she would like to become a sole trader. She had heard that it is a simple and cheap way to start a business. At the trade licensing office, however, they explained to her that the use of the results of creative intellectual activity by their authors is not an area for which a trade licence is granted. Under the Trade Licensing Act, this is a so-called liberal profession, to which different rules apply. In general, however, it can be considered a very simple way of doing business, and Zora therefore chose precisely this path.
For the pursuit of most liberal professions, such as those carried out by, for example, attorneys, notaries or veterinarians, certain rules must be met. First of all, these persons must obtain education in the relevant field (for example, for an attorney, the condition of successfully completing a second-level university degree in law) and subsequently become a member of a professional organisation (the Slovak Bar Association, the Chamber of Veterinary Doctors of the Slovak Republic, and others), which is associated with further conditions – successfully passing any relevant examination, as well as complying with the internal rules of the particular chamber. This represents the path to the lawful pursuit of certain liberal professions.
Here, however, one must be careful. Zora, Mária, Lenka, and all other authors who carry out their activity within the meaning of the Copyright Act, where the result of their activity is a work in the field of literature, art or science, do not have to meet any of the above-mentioned conditions to pursue such a liberal profession; they are not even obliged to be a member of any professional self-governing body. The pursuit of this liberal profession is therefore very simple and is not conditional on any membership, registration or education. The only mandatory registration is with the tax office.
Under the Copyright Act, a person who personally gives an artistic performance by singing, playing, performing, reciting or otherwise creatively performing an artistic work is a performing artist. Such as, for example, the performing artist Zora, who begins to offer her services and sings at a few smaller concerts and festivals, for which she is paid a fee. With the payer of the remuneration she concludes a contract under the Copyright Act, and since she has no income other than the fees, she also concludes with them a written agreement that the fee paid to her will already be taxed, i.e. the payer will carry out the withholding on her behalf. Zora thereby avoids the obligation to file a tax return.
Mária devotes herself to acting fully – in addition to performances in the theatre, she also acts in various children's shows and has already tried a smaller film role. Like Zora, she has her contracts concluded under the Copyright Act, but unlike Zora she receives the fee from companies in an untaxed form, because she has concluded an agreement with the payer of the remuneration that it will pay her the remuneration untaxed, without applying withholding tax, and Mária thus settles her tax obligations herself in her own tax return. On the one hand she receives a larger amount each month, but on the other hand she incurs several statutory obligations.
First of all, she will be obliged to carry out registration with the financial administration, the result of which will be the assignment of a tax identification number (DIČ). Under this DIČ she will subsequently be obliged to file a type B tax return, in which, however, she will include only the income from those fees that were not taxed on the basis of the written agreement not to apply withholding tax. With the tax return she then has the option of claiming her actual expenses, or flat-rate expenses of 60% of total income.
Mária remains advantaged in one respect, however – since she is not considered an entrepreneur in the true sense of the word, she is not obliged to communicate with the authority electronically, so she can choose the form of communication that suits her best.
Both Zora and Mária also have payment obligations towards the health and social insurance institutions. They are obliged to pay health insurance in the same way as sole traders, and they pay contributions to the social insurance institution on the basis of an assessment of the contribution amount according to income for the last tax period, so for the first year of such business they do not yet have to pay social insurance contributions.
Setting up a company
Lenka, like many modern entrepreneurs, made extensive use of social media to promote herself. On Instagram she published her creations and created individual paintings on the basis of a contract for work under the Copyright Act and the Civil Code. In the contract for work, she agreed with the customer on the requirements the painting should have, the delivery time and the price for such a work.
Since her orders began to pile up, she considered selling paintings on a large scale. She would also like to combine the sale of paintings with organising exhibitions and possibly other services such as painting lessons. Since her planned activities are extensive and would require various types of contracts, which may be subject to various contribution obligations, she decides to set up a commercial company, in the best-known form – a limited liability company (s.r.o.).
Setting up an s.r.o. does mean a more costly start to her business, but given the diversity of the services provided, which do not relate exclusively to the use of her work, such a form of business is necessary. We presented more detailed information about how to set up an s.r.o. and the advantages and obligations associated with it in a previous article on starting a business, which you can read here.
Granting licences
Zora, Mária and Lenka must not forget that they have to take their artistic performances and the creation of works just as seriously as any other kind of business. They must pay attention to the contractual provisions when concluding contracts, whether they are contracts for an artistic performance or contracts for work.
For further handling of their works and performances, such as their reproduction, sale or exhibition, they must grant consent, that is, a licence. Licences represent another legal issue that may in many cases seem chaotic to artists.
When granting a licence, they must focus on all its provisions, but the most important can be considered to be:
- the manner of use of the work (whether they grant a licence, for example, for its broadcasting, exhibition or reproduction),
- the scope of the licence (whether they grant a licence for one broadcast or more, or whether they have the right to sell the work only in the territory of Slovakia or abroad as well),
- the time for which they grant the licence,
- the remuneration they receive for the licence granted.
It is also important whether the licence granted is or is not exclusive. After granting a non-exclusive licence, they may also grant a licence to use their work to further persons. Conversely, with an exclusive licence, only the person to whom the licence is granted is entitled to use the work. But beware: under the provisions of an exclusive licence granted, even the author themselves may be prohibited from using the work; it always comes down to how the parties agree.
Licence remuneration also has its further particularities and advantages. One of them is that if you agree with the payer of the licence remuneration that they will pay you the remuneration without applying withholding tax and you tax such remuneration yourself in your own tax return, then you can significantly reduce your tax liability thanks to claiming flat-rate expenses. At the same time, income from licence remuneration is exempt from paying social and health insurance contributions.
Ladies, make use of the opportunities that today's times offer us and do not leave your talent forgotten. If you enjoy something and have the drive, today's legislation offers you ways to turn your hobbies into a prospering business. The first step, however, remains up to you.