Wednesday, January 14, 2009

Apdayc Event Taxes In Peru

The website is here:

The observable interaction with this group for most foreigners is the following: If you have any kind of meeting or event w/ music (ie: company party, wedding reception, birthday party, etc), then you must register it with Apdayc and pay them a 15% flat tax for your event. The 15% is taken from the contracts you have with the music provider (band, DJ, etc), location (conf room, locale, site), and caterer (restaurant, caterer, etc).

Their website has a lot of information including some medical services that they provide for associates and workers of theirs.

They site Peruvian Law N° 822 which gives Apdayc the sole right to collect this tax. The law states that all musical works are the property of the author and composer of that work and anyone who uses that work must pay a tax to the author and composer. Apdayc is the only Peruvian entity that is allowed by law to collect this tax. Apdayc says that they represent 4,000 authors and composers in Peru. They also represent all other authors and composers in the world via their membership in CISAC.

Where does the money go? They say that most of it goes to Peruvian authors and composers and a small amount is used for administrative costs. This includes providing medical, dental, and funeral services to their members. They also mention payments to CISAC. They say that this money is monitored by INDECOPI.

Failure to pay this tax is punishable by closing down a locale after much legal paperwork. They say that legally they have the ability to close the locale and/or suspend the event if taxes are not paid. So any sort of restaurant, hotel, or other locale has an obligation to make sure that Apdayc is paid so that they don't get shut down.

Who pays? Of course this cost is directly passed off to the end user, you. In addition, the paperwork and transportation to/from Apdayc is also passed off on you. The locale simply makes you present your voucher from Apdayc when the event starts.

For what benefits are there in paying this tax? They list 'following the law' and the ability to use over 4 million musical works as the benefit.

Other parts of their site appear to propose/require taxes paid on music stored in cell phones, downloaded from the internet, or sold in MP3 format. They also have taxes that appear to be directed towards bus and airline companies who play music during transport.

How does this effect you?
From what I have read, seen, and been told, the only effect is that a locale will not allow the event to start without receiving the voucher from Apdayc that shows payment was completed. I don't see anything on their website directed at individuals, it mostly seems to be directed at extorting money from businesses and punishing them if they do not comply.

Helping hand to make sure poor artists are taken care of since copyright laws are not enforced? Or mafia using the law to 'legally' extort large fees beyond their rights?


H&L said...

If the intention was to ensure that Peruvian artists get the money they deserve they would be better focusing their attention on cracking down on the enormous amount of pirate CD's & DVD's that are available throughout Peru. Often sold right under the nose of the police.
This is just another tax that huts business, which in turn affects job creation, which in turn keeps the poor of Peru poor.

H&L said...

Even our neighbour who operates an internet cafe is charged this monthly tax.
The reason.... they have access to You Tube !