4% VAT on culture, cultural expense deduction, Art Bonus: Federculture makes proposals to the government

Federculture has put down on paper a package of proposals to support the production of culture and sent them to the government and parliament, launching an appeal: the package foresep roposals on tax breaks and interventions aimed at introducing structural changes in the sector. This is an operation that, for the first time, Federculture has chosen to conduct as a dedicated, paid-for information campaign in the main national newspapers and in particular in newspapers specializing in culture.

The proposals were, in recent weeks, also sent to the Minister of Culture, the government and the relevant parliamentary committees: the interlocutors, Federculture reports, have listened and a substantive discussion has begun. Empowering the proposals now, therefore, is a form of support for those in parliament and the executive branch who have shown attention to these issues. “Having passed the hardest moment of the emergency,” comments President Andrea Cancellato, “the whole country is working for recovery. After the war there was the Marshall Plan, today the NRP. Just as then, culture can be an engine of development and social inclusion. These are Federculture’s proposals in the fiscal and economic fields.”

“That culture constitutes a determining factor in social cohesion, development, and economic growth is now a shared certainty and confirmed on every occasion,” the appeal reads, “The interventions that the legislature, the government and, in particular, Minister of Culture Dario Franceschini have prepared in the most hardest of the pandemic emergency, which halted the cultural production and fruition sector earlier and for a longer period of time than any other, were important and effective in preventing its collapse. This is why Federculture, the association that represents the main institutions and companies involved in the management and production of culture in Italy, believes that structural measures that promote the recovery and stability of cultural and creative activities in our country are now indispensable. The proposals that we have submitted to the government at a time when it is launching an important measure on taxation are aimed at the dual support of supply and demand, therefore in favor of businesses but also of families; they represent an organic package of rationalization of tax instruments and serve to produce in the medium term also the growth of the economy, therefore of the GDP and the related tax revenue, thus contributing to the labor stability and employment growth of a sector that engages about 840,000 employees.”

Following are the proposals in summary. They begin with the deductibility of cultural expenditures: Supporting cultural consumption has the merit of directing resources to where cultural users are most interested, which is why Federculture proposes extending the deductibility provided for medical and pharmaceutical expenses to expenses for the purchase of entrance tickets or season tickets to museums, concerts and theater performances, movie theaters, the purchase of books and audio or video works, educational and outreach activities, workshops and laboratories, and guided tours.

Again, proposed VAT at 4 percent: culture, considered an essential good so much so that bookstores have been allowed to remain open even during the lockdown, should, according to Federculture, be facilitated in its circulation by minimizing the impact of VAT for all its sectors, on a par with what is already done in publishing, and thus equalizing its regime to that of states close to us and with an evolved cultural system.

Federculture also proposes a 2 percent share of public works reserved for the beautification of buildings: also in view of the large amount of interventions in public works planned by the NRP, according to the association, a revitalization of the law that provides that “State Administrations, Regions, Provinces, Municipalities and all other public entities, which provide for the execution of new constructions of public buildings must allocate to the beautification of them, through works of art, a share of the total expenditure provided for in the project, appears urgent.” The law is in place but poorly enforced, and Federculture is calling for its full implementation and adjustment. This would open up a phase of large-scale art commissioning throughout the country. For the same reason, the association calls for the reinstatement of the rule that allocated 3 percent (Law No. 208/205) of the allocations provided for infrastructure “to the expenditure for the protection and interventions in favor of cultural heritage and activities” (former Arcus fund, which for years allowed the realization of important interventions in the cultural field such as, among others, the construction of the MAXXI in Rome).

Federculture then calls forthe expansion of the Art Bonus: Law 106/2014 provides a tax credit of 65 percent for private contributions to certain categories of entities (opera and music institutions, managers of public cultural assets) but excludes other categories, creating, according to Federculture, unintelligible differences in treatment. Expanding it would make the instrument a strong incentive to finance the entire cultural chain, (exhibitions, festivals, etc.) and private-law entities that manage their own assets while being established by public entities and supervised by them. Finally, Federculture calls for the refinancing and strengthening of the Culture Fund: among the main measures taken by the legislature during the emergency was the establishment of the Culture Fund (divided on two compartments for the financing of public works and private initiatives) for 100 million euros in the biennium 2020 and 2021. A refinancing for the 2022/2023 biennium of 20 million for each year is provided for in the Budget Law 2022. What is needed instead, according to Federculture, is continuity and more resources for this tool, which is proving to be of great interest to the entire culture system, public and private.

Image: the Pinacoteca di Brera. Photo by James O’ Mara

4% VAT on culture, cultural expense deduction, Art Bonus: Federculture makes proposals to the government

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