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French film industry protests 3% VAT hike on cinema tickets

VAT on cinema tickets set to rise to 10% at the beginning of 2014.

The French film industry has slammed a move by France’s Socialist government to increase value-added tax on cinema tickets from 7% to 10% in 2014, while VAT on other cultural events - such as opera, theatre and books - will be 5%.

The plans were first announced at the beginning of November and the country’s powerful cinema guilds have been lobbying to amend the decision. But the lower house of parliament rejected their request in a session on Tuesday evening.

The 10% consumer tax will be applied to tickets alongside the 10.6% levy, which helps fund the activities of the National Cinema Centre (CNC), making for an overall tax burden of 20.6%.

France currently has three VAT rates: 5.5%, 7% and 19.6%. They will be changed to 5%, 10% and 20% at the beginning of 2014, under plans to simplify the system.

“Does the French government still consider cinema to be a cultural activity?” wrote cinema bodies Blic, Bloc, L’ARP, UPF and SACD in a joint statement.

The organisations said that the planned 3% hike, which would raise some $105m (€80m) on the basis of recent box office figures, meant VAT on cinema tickets had “nearly doubled in the space of two years”.

“The government is thus excluding cinema-going, the most accessible cultural activity of all, from the reduced tax rate of 5% which is applied to all other forms of cultural activity: theatre, ballet and opera as well as the literary sector.

“By excluding cinema from the cultural sector, the government is breaking with a policy which has prevailed in France for close to half a century which has made all forms of culture accessible to all, thanks in large part to the reduced VAT rate,” they said.

Tuesday’s decision to retain the VAT hike follows a $200m (€150m) levy on the CNC’s budget announced in September as part of the French government’s austerity budget aimed at slashing the country’s $2.4 trillion (€1.8 trillion) public debt. 

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