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Cultural VAT to be cut to 10% in Spain

In a move that will come as a relief to the Spanish live music industry, Spain’s minister for education, culture and sport, Íñigo Méndez de Vigo, has announced a cut in the rate of cultural value-added tax (VAT) to 10%.

The reduction confirms a manifesto promise by prime minister Mariano Rajoy’s People’s Party, which last September pledged to reduce VAT for live entertainment, or “cultural shows” (espectáculos culturales).

Cultural-sector VAT has stood at a record 21% since September 2012, when Rajoy increased the tax, which previously stood at 8%, in an effort to plug a hole in Spain’s public finances. The tax hike has been catastrophic for the Spanish live industry: revenue from ticket sales fell 27.5% between 1 September 2012 and summer 2013 alone, and the country’s live music industry only recently recovered to its pre-2011 levels last February.

The new rate of cultural VAT will be 10%, Méndez de Vigo (pictured) confirmed in an interview with morning TV programme Los Desayunos de TVE.

The Canary Islands, an autonomous community of Spain off the coast of Morocco, in November cut cultural VAT to 3% from 7%. Then-president of the Association of Spanish Promoters (APM) Pascual Egea said it demonstrated the Canarian government “understands the importance of culture”.

 


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