Add Tax To Your Commission ✪
As a tax registered distributor or administrator, you may wish to add tax to the commission you are charging to your clients. If, for example, your artist earns £1000 and you take a 10% commission, your commission is £100 and you pay £900 to your artist. But you may wish to add an additional 20% tax of £20 on top of this commission. In this article, we will discuss how you can set up such a Tax scenario on Curve.
Adding tax to your commission is available to Curve Pro clients only as part of the Self-Billing add-on ✪
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Select a Distribution Statement Design in Your Settings
If you wish to add Tax on your Commission, a Distribution Statement Design is required. This will add the Distribution Fees and Costs as a separate transaction on the Statement Of Account, providing greater clarity where the Tax On Fees % is applied on.
You can select a Distribution Statement Design in your Settings, to be applied as a default to all of your Contracts, as per the example below. Or you can select a Distribution Statement Design only for a select group of Contracts using Companies.
Additionally, we recommend completing the VAT Number field in your Statement Design settings, as this will be displayed on the Fees Invoice.
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Set the Fees Invoice Tax Rate on the Payees
To get started, please go to Contracts > Payees. In the Tax Info area of your Payees, you will need to complete the Fees Invoice Tax Rate field. The other fields in the Tax Info area are only relevant if you wish to add Tax or WHT to your artist's royalties.
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Enable Generate Fees Invoice in the Contracts
A Fees Invoice Tax will only be deducted from the royalties when the Generate Fees Invoice option is enabled on the Contract.
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Review the Output
The next time you create a statement for these Contracts, an additional Tax On Fees will be subtracted from your artist's royalties. You can view this Tax On Fees on the Transactions tab of your Contract, on the Statement Of Account, or on the Fees Invoice.
The Tax On Fees will be applied regardless of the Balance having reached the Minimum Payout or not. Also any Self-Bill Invoice Tax, in combination with the Distribution statement design, will be applied to the sales regardless of the Balance reaching the Minimum Payout or not.
Impact of the Distribution Statement Design on the output
The Distribution Statement Design separates the total sales, distribution fees and costs as a Transaction on the Statement Of Account. This makes it clearer for your artist how the Tax On Fees % is applied.
Generally, taxes set on a Payee are only applied the moment the Contract's balance reaches the Minimum Payout. In a Distribution Statement Design however, the Taxes are calculated on the Sales and the Distribution Fees & Costs on a per statement basis, rather than on the total Balance. This means the Tax On Fees will be applied regardless of the Balance having reached the Minimum Payout or not. Also any Self-Bill Invoice Tax, in combination with the Distribution statement design, will be applied to the sales regardless of the Balance reaching the Minimum Payout or not.
Worth considering; if there is an ongoing balance in the statement at the time of setting up the Tax Info, by default this balance will be ignored in the Tax calculation. If you wish to add Tax to this Opening Balance, you will need to do so manually.