Culture is future » Financing and economic models


Forum d'Avignon 2011: Tax systems in favor of culture analyzed in 18 countries! by Ernst & Young

For the 2009 edition of the Forum d’Avignon, Ernst & Young realized a first comparative study on tax policies in favor of culture, in 14 countries. In 2010, a first update has been completed with analysis of the Greek and South African examples. In 2011, Australia and Turkey have been added to this international benchmark, now covering almost all of the G20 countries.  

In the 18 countries studied (South Africa, Germany, Australia, Brazil, Canada, China, South Korea, Spain, the USA, France, Greece, India, Italy, Japan, Mexico, the UK, Russia and Turkey), tax systems are used within the cultural sector to support creation. Cultural taxes are far from being an exception: they are the rule! The study acknowledges the systematic resort to incentives (reduced rates, tax credit, exemptions etc.) On the other hand, a major difference appears when talking about specific measures, that is to say the implementation or not of cultural taxes aiming at directly financing the sector: only 11 countries out of 18 are impacted, with France leading the way with 14 specific taxes, followed by Greece with 9 taxes, all other countries only offering one to three types of cultural taxes. The inventiveness in terms of taxes mainly relates to the audiovisual sector, notably in France (6 taxes out of 14). 

The French exception can be a source of confusion when considering the readability of tax systems. But it above all indicates a massive support of culture in its wholeness. Other countries choose to have more specific types of support (e.g. video games in Canada or music in Germany). 

Despite the diversity and inventiveness of tax measures, the study acknowledged that all countries give priority to cinema, to facilitate investments and locate shootings, as well as to the cultural heritage. Characteristics exist, related to specific policies in force in the various countries studied : South Africa mixes supports to culture and sport whereas China and India, because of their population and their size, support investments in rural area to foster the access to culture and the transformation of public cultural organizations into private players. 

Apart from the UK, privileging cultural players (firms, physical persons and philanthropists) and investors, the study highlights different choices depending on the countries: Brazil and Spain mainly chose to support investors thanks to specific tax systems, whereas 11 other countries favor a fiscal policy in favor of cultural key players. 

Cultural tax systems are impacted by austerity policies in western countries: for 3 years, the less advantageous tax systems in favor of philanthropy in the USA has led to an important decrease of the private financing of culture; in Italy, in Greece, in Spain – 3 European countries where public finances are rather weak, we can witness a significant drop of the state involvement.

In Europe, only France and Germany steadily support culture, in terms of direct public investment as much as by maintaining tax incentives. Among the emerging world-powers, some made of culture a clear priority: Russia, China and Turkey massively increase their public engagement for culture. Paradoxically, main players in the field of cinema and audiovisual, such as Brazil and India, reduced in 2011 their public support to culture. 

Internet and the digital economy are still put aside, except in Canada. They actually remain taxed more to finance other cultural activities. The trend acknowledged in 2009 is confirmed: the new media are the poor sources of financing and the strong room to reallocate a part of their cash flows to media and culture. 


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