Based on the assumption that the artistic activity is exercised by regular profession in accordance with the provisions of article 53, paragraph 1 of the TUIR, the Italian Revenue Agency states that the compensation paid for the transfer of rights for exploitation and economic use of the artist’s image right constitute a self-employment income pursuant to Article 54, paragraph 1-quater of the TUIR. The income from the economic exploitation of the image right is considered as a positive “additional” components of the self-employment income earned by the individual in the exercise of his professional activity.
The Criteria of Territoriality
A critical point is linked to the criteria of territoriality. The criterion to be identified is regulated according to Article 23, paragraph 1 lett d) of the TUIR. Taking into account the location of the activity and not that of the economic exploitation of the image right, the withholding tax of 30% provided for non-residents will be applied (article 25, paragraph 2 of the DPR 600/73).
In addition, to overcome the difficulties related to the “localization” of such compensation individuals can:
- Adopt the same territoriality criteria as for remuneration for artistic or sporting activities;
- Adopt the analytical criteria related to the peculiarity of the additional fees for image rights, by identifying the places where the right is exploited.
Unfortunately, the answer given by the Revenue Agency does not seem to be extendable to cases in which the image right has an independent nature with respect to the performance as it would change both the criteria of territoriality and the conventional regime.