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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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there, please can you advise me on the following. I am

Resolved Question:

HI there, please can you advise me on the following.
I am a ltd company who is engaging and Singer from the US to sing at an event in Italy - what are the tax implication? Does the singer invoice us in the UK e.g. $10000 and do we just pay that as the net fee or is there other implication we have to consider?
Many thanks
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

If you are engaging a professional to perform for you at an event in Italy and he is self employed, it would be in order to receive a fee note from him and pay the amount in full.
There should be no tax implications to worry about. It would be up to the artist to account for the income to US tax authorities.

Your company would be making a payment for professional services.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

if the service took place in the UK and not in italy would this still apply?

So just to get this straight. My UK company would not be liable for any national taxes or fees other than paying the artist cost, which they would need to invoice for? Is that just a company expense (professional services)? I ask this because there are all sorts of laws with regards ***** ***** and sports person, so just need to 100% before engaging the artist as id have to include this in their agreement

Expert:  taxadvisor.uk replied 2 years ago.

Waleed, thanks for your reply.

Your agreement with the artist should be that of a service provision with clear stipulation that the artist would be responsible to the tax authorities for taxation.

You are engaing the artist as you would engage an accountant for a special project and expect him to render an invoice for professional services.

Make sure the fee payment clause covers the points about paying gross.

In your books you would process the invoice as normal expenditure and refect it as professional fees. The same treatment if the event was in the UK and not in Italy.

I hope this is helpful and answers your question.

Customer: replied 2 years ago.

sorry to be a pain. so the artist stated that

2. The Promoter (ME) agrees that the Fee will be net and free of all local and national taxes.

meaning UK right?

So it does not exempt them from being liable for the said fees in the US?

Expert:  taxadvisor.uk replied 2 years ago.
Waleed, thank you for your reply.

My interpretation would be that the artist wishes this fee to be paid gross and not subjected to local taxes and national taxes outside the USA.

Under double taxation agreement between UK and USA, same income can't be taxed twice. If income is taxed in one country, then when it is chargeable to tax in country of residence, foreign tax credit relief is available.

I hope this is helpful.
taxadvisor.uk and 2 other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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