Entrepreneurship for Musicians

Conservatory of Utrecht30 September 2011

Lecture 2

Business Forms: some options

Zelfstandig ondernemer

V.O.F.: Vereniging onder Firma

Stichting

Vereniging

B.V.: Naamloos vennootschap

Maatschap

Being employed• You pay wage tax/income tax• social insurances• More income security• Unemployment benefits • Retirement plan• CAO

Being self-employed: Eenmanszaak

• VAT (BTW) registration• No claim to unemployment payments• No Insurances besides Ziekenfonds• You pay less taxes:– Self-employment reduction– Starter-reduction– Investment reduction– Writing off of – Turnover-Costs

Self-employed• Need for bookkeeping (incl. separate BTW reg.)• Minimum work hours 1225 per year as self

employed for the benefits• Minimum amount of customers (at least 3)• You have to be independent• Your colleagues have to be independent• Registration at Chamber of Commerce (obliged)• Your VAR says: Winst uit Onderneming (Profit

from Undertakings)• Fill out the form: “Voorbereiding Gemeenschappel

ijke Inschrijving Startende Onderneming. Eenmanszaak vof cv en maatschap”

Free-lance artist• Almost the same as self employed, but

no self employment reduction, no starter reduction, no investment reduction

• When you work less than 1225 hrs in your company

• You can have a BTW number• You can have a regular job besides your

free lance work• “Inkomen overige werkzaamheden”

Opting In: The Paye Way• Your employer pays taxes• If you’re not regarded self employed• No rights on WW• No deductions of work-related costs• No obligation for bookkeeping• “Semi-job”• Used in combination with the KAR• Means extra work for the customer (if

above the KAR amount)

KAR of Kostenvergoedingsbeschikking

• Small Artists Rule– Is used when you are not self employed (with VAR)– Only for artists ( so not for conductors )– Max. €163 per performance is regarded as only

expenses– End of year you get a statement of pay– Easy for the customer– Still regarded as income (from other sources)– You have to prove your expenses – Above €163 regarded as wage

Kostenvergoedingsbeschikking• When you can prove your costs are higher than

€163• Ask for a Kostenvergoedingsbeschikking at the

belastingdienst• You still have to prove your expenses at the end

of the year• Not applicable when– Self employed– Private settings– Payroll

BTW/VAT

• Performance: 19% BTW• Composing and arranging: free of BTW• Teaching: – 21 and younger: free of btw– Older than 21: 19% btw

Administration example:turnover Cost

number date Ex btw BTW perc BTW incl. BTW number date Ex btw BTW perc BTW incl. BTW

1 1-1-2011concert € 250,00 6% € 15,00 € 265,00 c1 4-1-2011Strings € 15,00 6% € 0,90 € 15,90

2 3-1-2011pianolesson € 20,00 19% € 3,80 € 23,80 c2 31-1-2011travel costs January € 96,00 6% € 5,76 € 101,76

3 3-1-2011pianolesson € 20,00 0% € - € 20,00 c3 1-1-2011dinner Amsterdam € 25,00 6% € 1,50 € 26,50

4 3-1-2011Arrangement € 150,00 0% € - € 150,00 c4 5-1-2011sheetmusic € 35,00 19% € 6,65 € 41,65

5 4-1-2011rehearsal € 50,00 6% € 3,00 € 53,00 c5 6-1-2011sheetmusic € 14,00 19% € 2,66 € 16,66

€ - € - € - € -

€ - € - € - € -

€ - € - € - € -

€ - € - € - € -

€ - € - € - € -

€ - € - € - € -

€ 490,00 € 21,80 € 511,80 € 185,00 € 17,47 € 202,47

Calculating VAT

• You buy a piano for 10.000 euro incl. VAT. VAT percentage is 19%. Ho much is the piano excl. VAT? And how much is the VAT?

Answer:

• 10.000 divide by 119, times 100=• 8403,36 ex vat

Calculating VAT

• You buy a piano of 10.000 excl. VAT, VAT is 19%. How much is the piano incl. VAT

Answer

• 10.000 plus 19*(10.000/100)= 11.900

Payroll Services

• Administration Office• Will send a bill for you, including BTW, Loonbelasting

and social security fees• Will send you yearly a loonstrookje: wage

declaration• Keeps all the administration very simple• Does cost some money!• Is easy for the customer• http://www.artiestenverloningen.nl/

WWIK• Law Income Security for Artists• Max 4 years in a period of 10 years• Around 70% of a state-welfare (1114€)• You can earn up to 125 % of un-

employment payment• Extras like money for investments,

courses• http://www.cultuur-ondernemen.nl