Copyright contracts are essential for many professions, especially for writers, artists, lecturers, and all those engaged in creative work. These contracts allow authors to commit to creating an original work, while clients pay the agreed fee. But how does this work in practice? What are the rules and benefits of this engagement model? Here’s what you need to know.
A copyright contract is an agreement between an author and a client (employer) in which the author agrees to create a specific copyrighted work, while the client commits to paying the agreed fee. This type of contract is beneficial for employers as it allows for lower tax and contribution payments, especially if the author is already employed elsewhere.
Benefits are:
- Lower Tax Burden: The taxes are usually lower compared to standard employment contracts. For example, taxes and contributions for authors who are already employed may be approximately 8% lower compared to those for permanent employees.
- No Time Restrictions: contract does not impose time constraints on the engagement of the author, which can be a significant advantage for projects without strict deadlines.
The copyright fee is calculated based on the gross amount, from which standard expenses are deducted to determine the taxable base. The following taxes and contributions apply:
- Personal Income Tax: 20%
- Pension and Disability Insurance Contribution: 26%
- Health Insurance Contribution: 10.3% (only if the author is not insured under another basis)
Formula:
Net amount × Coefficient = Gross amount
According to the Copyright and Related Rights Act, the following are considered copyrighted works:
- Written works: Books, articles, computer programs
- Oral works: Lectures, speeches
- Dramatic and musical works
- Film works: Cinematic and television productions
- Visual art works: Paintings, sculptures
- Architectural and industrial design works
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