According to the current Copyright Act, the author’s right will last for 70 years after the death of the original author (in the case where there are multiple authors (co-author), 70 years after the death of ‘all’ authors), and the neighboring right (record producer’s right portion) will last for 70 years from next January 1st of the release date of the original record.
According to the current Copyright Act, the person who holds the author’s right has the right to reproduce, perform, transmit, display, distribute, rent, and adapt the original work. Therefore, a fee shall occur whenever someone else attempts to use the work (music) for the purposes stated above.
Copyright fees are collected by the Copyright Trust in accordance with a set of regulations. Even at this moment, copyright fees are constantly being collected from numerous sources such as broadcasting networks (TV, Radio, etc.), online music streaming services (Melon, Bugs Music, etc.), various performances (karaoke, concert, etc.), publishers, etc.
Under the Copyright Act, only non-profit trust institutions authorized by the Minister of Culture, Sports, and Tourism are allowed to collect and distribute copyright royalties in Korea.
As a for-profit organization, Musicow CANNOT be a copyright trust management organization, and is not authorized to collect and distribute copyright royalties.
Therefore, Musicow has signed up as a member of the Copyright Trust and is constantly giving away the distributed copyright royalties to the music investors.
Usually, copyright royalties occur the most in the first year when the song is released. Then, the total amount of copyright royalties gradually decreases over the first and second year. After that, it tends to stabilize.
In principle, when a song is remade, the copyright of the remake song is attributed to the original song. Therefore, the copyright royalty usually increases when a song is remade.
However, the rights to the remake song may be limited according to the special agreement of the transfer contract with the original artist. In this case, the details will be shown separately in the song information.
However, the amount of copyright royalties will vary depending on the popularity of the remade song. Moreover, even when a song is remade, the royalty WILL NOT increase significantly in the next month since it takes time for the collected royalties to be distributed.
If you are expecting a rise in copyright royalties after a remake, it would be wise to hold the rights of the song for a long period of time.
The copyright royalty might vary depending on the popularity of the remake.
Musicow DOES NOT GUARANTEE future copyright royalties under any circumstances.
When you own the copyright of a certain song, a profit will occur when you receive a monthly settlement (copyright royalty) and when you sell the copyright at a price higher than the amount you have used to purchase it, both of which shall be classified as ‘Other Income.’
In the case of ‘Other Income,’ you can select ‘separate taxation’ to conclude your tax obligation if the income per case is less than 50,000 KRW and your annual other income (total) is less than 3,000,000 KRW.
However, if your annual other income (total) exceeds 3,000,000 KRW, you must add the ‘Other Income’ to the global income tax base and report it by the end of late May every year.
When does taxation occur while using Musicow?
1. When your copyright royalty income exceeds 50,000 KRW
2. When your sales revenue exceeds 50,000 KRW
Musicow Tax Return Filing
* NO withholding tax when below 50,000 KRW/case, which is the tax threshold.
[See: INCOME TAX ACT Standards for Enforcement 84-0-1 [Sphere of Application of Other Income Tax Threshold (by case)]
* If the copyright royalty and sales revenue exceed 50,000 KRW per case, 22% of the total revenue will be withheld. Then, you must report your revenue as ‘other income’ and pay the taxes.
* The ‘other income’ of Musicow does NOT exclude necessary expenses.
** If you have the following income, you are subject to the Global Income Tax Return
1. Total amount of below 50,000 KRW/case + above 50,000 KRW/case exceeds 3,000,000 KRW/year
2. Only have cases that are below 50,000 KRW/case, and ‘other income’ exceeds 3,000,000 KRW/year
3. Only have cases that are above 50,000 KRW/case, and ‘other income’ exceeds 3,000,000 KRW/year
4. The total amount of other income (excluding necessary expenses) outside of the income from Musicow exceeds 3,000,000 KRW/year
How to file a Global Income Tax Teturn
* Period: May 1st ~ 31st every year
1. Visit the homepage of National Tax Service (http://www.hometax.go.kr) and file it yourself
2. Visit a tax office under local jurisdiction to file a tax return
3. Contact a nearby tax accounting office for professional help
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