Money and Taxes

Are you a creative artist or entrepreneur?

The first question isn’t about taxes, but rather a practical one: do you work on a regular basis, independently, and with a certain degree of autonomy? And do you intend to make a profit (even if you aren’t there yet)? If so, you’re likely considered an entrepreneur by the tax authorities, even if you only take on assignments occasionally. As a hobbyist, you’re not considered an entrepreneur—but that also means you can’t deduct business expenses, such as your camera, materials, or studio rent.

VAT: Not a Single Rate, but Several

This is where things often go wrong. Take a photographer who shoots a wedding or takes on a corporate assignment: that’s a service, and in principle, you charge the standard 21% VAT rate on it.

But what if that same photographer sells a limited, signed, and numbered edition of their own art photographs (up to 250 pieces) directly to a collector? In that case, the reduced rate of 9% applies, just as it does for paintings, sculptures, and original engravings created by the artist themselves and considered works of art. The distinction therefore lies in what you are selling: a service (carrying out a commission, providing a consulting service) versus an original work created in one’s own name. See Dutch Tax Authority

For the sale of art, the lower rate of 9% almost always applies, as long as it involves original work being sold for the first time. Reproductions, posters, or decorative objects produced in large quantities are subject to the 21% rate.

Not sure? You can send a description of your working method and product to the Tax Authority and request a VAT ruling. This provides certainty and prevents additional tax assessments later on. Virtualoutcomes

Low revenue? Then the Small Business Scheme (KOR) is for you

If your annual revenue does not exceed €20,000 in a single calendar year, you may be eligible for the Small Business Scheme (KOR). In that case, you won’t charge your customers VAT, you won’t have to file a VAT return, but you also won’t be able to claim a VAT refund on your own purchases (such as equipment). For many photographers and artists with fluctuating, modest incomes, this is a huge administrative relief. Be sure to recalculate annually to see if it’s still beneficial, especially if you’re planning a major investment. SME Service Desk

What about grants?

Many creators think that a grant is “free money” that isn’t subject to tax. That’s only partly true. A project grant is taxable income that you simply include in your income tax or corporate tax return, even though no VAT is due on it because a grant is not payment for a service rendered. Do you receive a grant from, for example, the Mondriaan Fund? As a rule, that also counts as taxable income. Only certain prizes and scholarships may sometimes be exempt—check this on a case-by-case basis. Virtualoutcomes

In short

Taxes don’t have to be an obstacle to your creativity, but they are something you should look into thoroughly once: which VAT rate applies to what you sell, whether the KOR works for you, and how to correctly report subsidies. An hour of research, or a conversation with an accountant who understands the creative sector, will save you a lot of stress later on and prevent unpleasant back taxes.