New procedure for withholding and paying PIT and SSIMC for payers of royalties from 1 July 2021 to 31 December 2021.
- How do I calculate and pay royalties?
The tax withholding procedure does not change for payers of royalties that are a collective management organisation (see the list on the Ministry of Culture website), but the PIT payment deadline is the 23rd day of the following month.
Payers of royalties that are not a collective management organisation must withhold a tax of 25% per annum from royalties (without deducting expenses), if the recipient has not registered a business, of up to 25,000 euros per year, which consists of 80% SSIA tax and 20% PIT.
If annual income from royalties exceeds EUR 25 000, 40% tax is withheld from that amount.
The payer of royalties does not have to pay the SSIA 5% pension contribution after 1 July 2021. The payer also does not need to submit an employer’s report to SRS, but must notify SRS on the amounts paid to the private individual, as required, and pay the tax by the 23rd date of the following month.
If the recipient of royalties has chosen to receive royalties as income (has registered a business), the payer of royalties is not liable to withhold tax, and income is declared as Income (code “2007”) in the notification on amounts paid to a private individual. This notification must be submitted through EDS by the 15th day of the following month.