ACEI 2014
Tax incentives as a measure
to support the arts in a
globalizing world
Renate Buijze
[email protected]
27 June 2014
Art in a globalizing world
• Common good: “the goods that are shared by a group of
people in consumption and possession” (Klamer, 2004)
• Art, being a common good, can be shared by
communities spread across boundaries
• With the common good a high degree of loyalty,
altruistic- and cooperative behavior are involved, thus
members of the community are potential donators
• Culture no longer shared within one nation, but among
communities across countries
New opportunities to finance art
• Communities that share a good expand across countries
• Therefore the opportunity arises to attract foreign
donators
Q: Larger group of potential donors or same
size but spread across countries?
However….tax barriers
• Tax incentives are often only granted to resident arts
organizations, making it more costly for donors to
contribute to a foreign arts organization
• Arts organizations thus face unequal competition when
fundraising abroad
• This creates a tax barrier to raise funds abroad
• Solution: applying tax incentives in cross-border
situations
Government support for the arts
• In most Western countries the arts receive government
support in the domestic situation
Q: Do the arguments underlying government
support for the arts also hold in cross-border
situations?
Q: Can arts organizations finance their
international activities by relying on the
domestic support system?
Existing solutions
State solutions:
• Unilateral solution: removal of geographical restrictions
• Bilateral solution: bilateral tax treaties
• Multilateral solutions:
A) Treaty on the Functioning of the EU as enforced by
European Court of Justice
B) Proposal for a Statute for a European Foundation
Private solution:
• Networks of charities to channel donations with tax
benefit from one country to the other
Conclusion
• Arts organizations and their audiences function across
borders, resulting in art that is shared in communities
across borders
• Government support, however, mainly focuses on arts in
the domestic situation
• This hinders arts organizations when wanting to raise
funds among their foreign audiences
• Several solutions exist, but which one is best from a
legal and/or practical viewpoint?
• Evaluation of solutions necessary
Questions & comments?
E-mail: [email protected]
SSRN: papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2249634
Discussion points
• Larger group of potential donors or same size but spread
across countries?
• Do the arguments underlying tax incentives for the arts
also hold in cross-border situations?
• Can arts organizations finance their international
activities by relying on the domestic support system?