Managing Tax and VAT
Tax and VAT can be complex. Explore useful guidance and resources to help you understand and manage your tax affairs as a music creator.
General Concepts
Tax Reporting
Preliminary Tax Assessment
You can think of your preliminary tax assessment as a budget for your expected income. If your finances change during the year, you should update it to ensure you pay the correct amount of tax. Any differences will be settled in your annual tax return, resulting in either a tax refund or additional tax to pay.
Learn moreTax Information Form
If you run a business, you must submit a Tax Information Form stating your final profit or loss for the year. This determines whether you have paid the correct amount of tax and whether you will receive a refund or need to pay additional tax. The form must be approved by 1 July of the following year.
Learn moreAnnual Tax Assessment
Your Annual Tax Assessment shows whether you paid the correct amount of tax during the previous year. It is issued each March and indicates whether you will receive a refund or need to pay additional tax. You are responsible for checking that the information is correct.
Learn moreTaxable Income from Music
As a songwriter or composer, you must pay tax on income earned from your music. This includes royalties, fees, and payments for the use of your music in films, advertisements, and other productions.
Payments from record labels and music publishers are also taxable. Most grants are taxable, although some travel and honorary grants may be exempt.
Please note that payments from Koda and NCB are reported to the Danish Tax Agency as B-income.
Financial Support and Advice
If you are unsure about your tax obligations as a songwriter, it can be helpful to speak with an accountant or tax advisor who has experience with the finances of artists and musicians.
The Danish Tax Agency offers a number of guides to help you understand how the tax system works:
You can also find useful information from the Danish Arts Council (Dansk Kunstnerråd), which publishes the annual guide Artists’ Taxation (Kunstnernes beskatning). It is an excellent A-to-Z resource featuring guidance, rulings, and practical examples.
Please note that Koda is unable to provide guidance on tax and VAT issues.
Keep Records
It is important to keep records of all your income and expenses, whether you are self-employed, receive fees, or are employed by an employer.
If the Danish Tax Agency requests documentation, you must be able to provide records of your income and any tax deductions you have claimed.
Remember to keep all accounting records and supporting documentation for five years from the end of the financial year to which they relate.
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