Skip to main content

The Spanish Tax Authorities (STA) have recently issued a briefing note on the taxation in Spain of foreign entertainers and sportspersons. This note includes several guidelines where the main goal is to shine some light on a matter that is currently generating considerable uncertainty within the music industry in general, and the live music sector in particular. According to it, entertainers (including musicians) may be taxed in the country where a qualifying appearance takes place. The Spanish promoter or person that making the payments is held responsible for withholding tax on the gross amount and pay it to the STA.

What entertainers qualify for withholding tax? 

There is no general definition of the termartist” or “entertainer” within international tax rules; it needs to be addressed on a case-by-case basis. What is generally accepted, however, is that “artistic appearances” must, for these purposes, include an entertainment character (e.g. a live performance) whether it takes place in front of an audience or is broadcasted in a media outlet. 

In this sense, singers, musicians, DJs, etc. would qualify for withholding tax to the extent that such entertainment character is present.  


What payments qualify for withholding tax? 

Payments directly connected to an appearance 

Artist income includes income derived by a resident of a State as an entertainer, such as a theatre, motion picture, radio or television artist, or a musician, or as a sportsman, from their personal activities as such exercised in another State, in connection with an appearance in such State. 

The above would include, e.g., the artist fee as well as any payments made to cover the cost of any rehearsals carried out by the artist in such State. 

Collateral payments 

Generally, no withholding tax shall be deducted from payments that are collateral to a qualifying appearance. However, an exception will be made whenever those payments are closely related to such appearance; that is, when it can be reasonably understood that such payments would not have taken place in the absence of such appearance. 

Some of the most controversial types of payments made in connection with international tours are examined below:  

Merchandising income 

Merchandising income will be subject to withholding tax in Spain as long as goods are sold during the event or as a result of it. 

Live broadcasting or streaming  

Income derived by the live broadcasting or streaming of an appearance will also be taxed in Spain. However, if such broadcasting or streaming is pre-recorded, payments will be deemed as royalties and subject to their applicable regulations.  

Image rights 

In general terms, payments made in consideration for the use, or the right to use the entertainer’s image in connection with such entertainer’s appearance in Spain will be taxed in Spain. 

Production services  

Payments made to foreign production companies (staging, lights, sound equipment and transport, etc.) are generally considered as business profits and exempt from withholding tax in Spain 

Exception – Proportionality rule

However, such payments to foreign production companies must be proportional and reasonable compared to the overall income generated by the entertainer’s appearance. If no proportionality is observed, it could be considered that part of such income should be attributed to the artist’s performance and taxed in Spain (anti-avoidance clause).  

According to the STA, the term “appearance” should not be limited to the physical performance of the entertainer, but it shall reasonably include all the elements without which such performance would be impracticable (backline, audiovisuals and other technical elements) and the event would lack its singularity 

Cancellation fees 

No withholding tax will be deducted from cancellation fees since they are compensation income in nature. 

Payments made for catering, runners and other supporting services 

Such payments will be deemed as business profits and exempted from withholding tax in Spain.  


Payments to intermediaries 

The withholding tax scheme will not change if the qualifying payments are made not to the entertainer directly but to another person. The person or entity making the payments (e.g., the promoter) is required to look through such arrangements and deduct withholding taxes as if the entertainer had received the payments directly. 

This scheme applies regardless of whether such intermediary is receiving such payment with the intention to avoid taxes or not. This allows this scheme to extend to artist management companies, orchestras, etc.  

There is no requirement for the taxing authorities to provide evidence that the intermediary is related or controlled by the entertainer, nor it will be necessary to proof that such entertainer is the beneficiary of any kind of payment from the intermediary, subject to the concrete provisions of the applicable Double Tax Treaty (DTT). 


How to work out withholding tax 

Tax rate 

The applicable tax rate for payments made to foreign entertainers is 24% unless they are resident for tax purposes in the EU (excluding UK as from 2021). In this case, the applicable tax rate is 19% 

Taxable base 

Withholding taxes apply on the gross amount of the artist fee. Cost deduction is generally not allowed.  


Here at Sympathy for the Lawyer, we have a strong track-record on tax and legal advisory to festivals, promoters and agencies. We have economists and tax advisors specialized in international touring tax planning and contract negotiations. You can contact us at and find out more about us by clicking on this link.


Author: Daniel García

La Newsletter #1 del negocio de la música

Cada semana te traemos las noticias clave, consejos e ideas sobre la industria.

Con enfoque ultrapráctico y sin venderte humo. Para mantenerte al día en lo que tardas en tomarte un café.

    Sobre Sympathy for the Lawyer

    Dejar un comentario