20. March 2023

Artists’ social security contributions – additional payment?

In this summary proceeding on the artists’ social security contribution (LSG Niedersachsen-Bremen of 22.12.2022 – L 2 BA 49/22 B ER), there was a lot of sweet stuff involved, because the person concerned was a chocolate manufacturer. Or rather, it was about a lot of candy, because the artists’ social security fund wanted € 4,200.00 from the chocolate manufacturer as an additional payment for the artists’ social security contribution.

This was preceded by an audit by the German Pension Insurance. This estimated the advertising sales of the chocolate manufactory as a lump sum and thus arrived at this amount. However, the operators considered the sum to be far too high, and they also felt that their existence was threatened by the claim of the artists’ social insurance fund, since their economic situation was already precarious as a result of the pandemic.

The Regional Social Court followed this line of argument and restored the suspensive effect of the action. This means that the chocolate manufacturer will not have to pay the artists’ social security contribution at least until the lawsuit has been terminated by judgment or settlement.

In essence, the judges criticized the fact that the artists’ social insurance fund had not credibly proven that the chocolate manufactory belonged to the group of so-called “self-promoters”.

Also the German pension insurance had taken as a basis a lump sum annual value of 19.000,00 € at advertising turnovers independently of the enterprise orientation and size. The chocolate manufactory concerned had indicated however only 50,00 to 225,00 €. In the opinion of the judges, the German Pension Insurance should therefore have investigated more carefully.

Pursuant to Section 24 (2) KSVG, self-promoters are companies that carry out advertising or public relations work for themselves and in doing so “not only occasionally” place orders with self-employed artists or publicists. This means that the artists’ social security contribution does not only apply to the classic users such as publishers, theaters or galleries. The artists’ social security contribution can also affect a car dealership or a nursery.

The deciding factor here is “not only occasionally”. According to the ruling of the Federal Social Court of 01.06.2022 (Az: B 3 KS 3/21 R), a certain regularity or permanence and a not insignificant economic extent is required. It did not impose any rigid limits here, but considered the one-time commissioning of a web designer to design a website to be insufficient. This also applies if the so-called “de minimis limit” is exceeded.

In the case of the “de minimis limit”, there is in any case no obligation to pay tax if no more than € 450.00 per year is paid for artistic/publicistic services for the purpose of advertising or public relations.

In principle, orders to web designers are also subject to the tax obligation, although a distinction must be made here as to whether the web designer takes on creative tasks (tax obligation affirmed) or administrative tasks (tax obligation denied). Also a search engine optimization does not fall under it.

So it remains complicated …

More about the KSK here.

Further content on the topic of self-promoters can be found on the website of the Künstlersozialkasse.

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