Distribution Rules

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Distribution Rules

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Distributable Amount

a. Deductions

i. Deduction of Administration Costs: Before attributing the royalties to the different distribution classes, a percentage to cover administration costs of PRISK shall be deducted. This percentage shall be the same for all the royalties collected. The percentage of the deduction shall correspond with the effective costs of administration of PRISK without aiming at accumulating a reserve or making profit.

ii. Deduction for Social and Cultural Fund: After the deduction of the costs of administration as set out, 10% of the royalties accruing from the rights of the performers shall be paid to the fund for social and cultural purposes. The elaborate rules for the use of the money from the said fund shall be set out by the PRISK Board and administered by it.

iii. Deduction of Obligatory Withholding Tax: A further 5% of all royalties received by PRISK shall be deducted as withholding tax.

b. Matrix for Calculation

Total Invoiced – Commission for Collecting Agent = Gross Total

Gross Total – (Administration Costs + Administration Gain) = Net Income

(Net Income +/– Financial Disposition) – Withholding Tax – Social and Cultural Fund = Net Distributable

C. Basis of Accounting

PRISK shall use accrual basis accounting. This means that revenues and expenses are allocated to the Financial Year in which the right to receive the revenue (year of performance) or the obligation to pay the expense actually arises in so far the revenues were paid in good time. The board may however in some circumstances cause revenue to be handled in the year in which it is actually received.

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