As a result of a ruling by the European Court of Justice (ECJ), certain remuneration entitlements under Sections 27, 54, 54a and 54c of the German Copyright Act (UrhG) are no longer subject to VAT.
This shall, since the distributions runs in September 2020, apply to all revenues from the private copying (ZPÜ) and rental and lending rights categories for the years 2018 and 2019. For the years 2016 and 2017, this procedure shall only be applied with the relevant final distributions.
GVL has adapted its distribution systems accordingly. What this means for you in concrete terms is that from the coming distributions onwards, two separate payout notifications will be provided for each payout if you participate in the distribution of private copy proceeds.
In this case, the payout notifications differentiate between revenue subject to VAT and revenue not subject to VAT. We have adapted our detailed reports so that both sources of revenue are shown separately, but you can still see the total amount.
Unlike the remuneration itself, however, the collection costs associated with private copying are subject to the currently reduced VAT and are shown accordingly on your invoice.
Important: Despite separate distribution documents, the payment to you will be made in a joint transfer of the entire payment amount.
To sum up:
- For each distribution payout, you will receive two payout notifications with immediate effect (if income has been generated in the revenue groups and has been received this year by GVL and is paid out)
- The detailed reports show the two partial entitlements and the total entitlement; both partial entitlements together yield the total entitlement you have achieved.
- The payout amount is the achieved total entitlement, reduced by a deduction of 16% VAT which must be deducted for the identified collection costs with respect to the share of the private copying income. Since the point of time of performance is defined as the issuing of the payout notification and payout of the entitlements, the temporarily reduced VAT rate set by the Federal Government shall apply until 31/12/2020.
- The general VAT reduction does not affect the current payouts of past distribution years, since the point of time of performance is authoritative.
Special aspect for instalments already paid out
This shall apply to all revenues from the private copying (ZPÜ) and rental and lending rights categories from the upcoming distribution runs onwards. For the revenues from rights categories private copying (ZPÜ) and rental and lending, which are no longer subject to VAT, we must now deduct the VAT paid out in March in the current payout run of the regularly executed initial distribution 2019.
The deducted amount will be shown separately on the payout notification.
You can read our FAQs on the topic here.
