Companies receiving their regular reviews this year by German pension insurance according to Sec. 28p para. 1 of Social Security Statute Book IV will be confronted by a change. As a result of the law to stabilize artists’ social insurance, passed in 2014, auditors are completing reviews in accordance with Sec. 35 para. 1 p. 2 Social Insurance Law for Artists at the same time. Auditors will be examining whether companies have made their contributions for orders to freelance artists and publicists. Often, what exactly is on the invoice is important. An electronic archive can prove helpful in such instances.
Threat of high penalties for incorrect reports
Companies receive mail from the KSK on a regular basis. The pension fund for artists requests that they list grants to freelance artists and publicists in order to be able to determine the client’s contribution. Any company that returns the report with negligently or even intentionally incorrect information in order to duck out of its obligatory payments does so under threat of serious financial penalties – theoretically, at least.
It used to be that the KSK bore sole responsibility for reviews, meaning the risk of an audit was slim. Things are different today. In 2015, for the first time, German pension insurance is taking over this responsibility in companies that were already due for a visit according to the Social Security Statute Book.
Who is an artist? That’s the question…
Here’s the problem: Who counts as an artist according to the logic of the KSK, and whether the services of an artist are subject to duty, can be a less than transparent matter. During the review, then, it makes sense to have not only all of your company’s own reports and assessments from the last five years on hand, but also all invoices created by artists, publicists, graphic artists, web designers, editors, photographers, and many other professional groups.
Advantage of electronic invoicing archive
Anyone who has an electronic invoicing archive that can seek out and provide every document in an instant clearly has an advantage. Especially if this is the first time your company is requested to report all dutiable fees. If it is, you will need to enter all net amounts from the past five years into a form along with dates and invoicing parties. Wading through a paper archive to find all that information would take the fun out of the process for anyone involved…