The tax applied to international revenue can vary from country to country. The tax that is generally charged on payments where the income is generated in one country and paid to a recipient based in another country is referred to as ‘withholding tax’ (WHT).
Tax treaties
Double Taxation Treaties are agreements which reduce the rate of tax on payments made between two or more countries. They are designed to protect against the risk of double taxation which occurs where the same income is taxable in two countries.
PPL proactively works with collective management organisations (CMOs) and foreign tax authorities to utilise these tax treaties to maximise international revenue collections by reducing the withholding tax applied at source to the treaty rate. The tax rates will differ from country to country depending on what has been agreed in that specific treaty, but most EU countries reduce the tax rate on royalties to zero.
What can you do to prevent double taxation?
One of the key factors that will support us to prevent double taxation on your payments is keeping your citizenships, residency and tax residency information up to date.
Collecting royalties from the US
If you have given PPL the mandate to collect for you in the US, then you may need to complete a US Revenue form.
PPL was the first music licensing company to be given Qualified Intermediary (QI) status by the US tax authorities – allowing us to collect all US revenue without the deduction of withholding tax at source. We are then responsible for deducting the correct rate of tax based on the tax treaty between a member’s country and the US. This means that we can pay through up to 30% more of US revenue that would otherwise have been held back in tax.
To benefit from PPL’s QI status and maximise royalties from the US, members are required to complete a US revenue form to allow PPL to apply the reduced treaty rate of tax. Most treaties reduce the rate of tax to 0%. Once completed, the forms are usually valid for three years. If a member does not complete the form, we are obliged to return the 30% withholding tax to the IRS.
To check your US Tax Form status, login to myPPL and click on “Accounts”.
If you have any questions or need any help filling out the forms, please contact our Member Services team by calling 020 8068 1054 or emailing memberservices@ppluk.com.