France/ 5.1 General legislation  

5.1.5 Tax laws

While there are no overall tax measures affecting culture, a number of specific measures are applied to different areas of culture. This section will provide only a broad outline of these measures and present several examples. Comprehensive information on this subject can be found at: http://www.culture.gouv.fr/culture/infos-pratiques/fiscal/index.htm.

Five broad areas are concerned by tax measures relating to culture: literary and artistic creation; the protection of cultural heritage; the development and diffusion of culture, cinema, audio-visual and recorded music; and the press and publishing. These measures mainly comprise: income tax relief; reduction of VAT (5.5%, 2.1% or total exemption); exemption from professional tax; exemption from wealth tax and registration dues.

Books, for example, are subject to a reduction of VAT (5.5% in metropolitan France). This reduction also applies to ticket prices for theatres, cinemas (excluding cinemas showing pornographic films or films inciting violence), circuses, concerts, variety entertainment, etc.

In France, there are three VAT rates:

The normal rate of 19.6% applies to all sales of goods or services except those subjected by law to another rate. The rate is 20.6% for CDs and cassettes.

The rate is reduced to 5.5% for the products required for everyday consumption, such as food and certain cultural products like books. This rate is the same for works of art carried out on digital or audio-visual supports.

The VAT rate is 2.1% for publications of the press and for ticketing of the first 140 stage performances of works recently created or presented in a new setting. It drops to 1.05% in the overseas départements.

The overall framework for legal incentives for public-private partnerships was laid down in Law n° 87-571 of 23 July 1987 on the development of sponsoring. It specifies the conditions under which sponsor companies are authorised to benefit from a range of tax incentives. Companies may deduct, from their taxable earnings, gifts of a cultural nature to charities or organisations of general interest, up to a maximum of 0.225% (or, under certain conditions: 0.325%) of their turnover.

A specific provision relates to contemporary art: companies that purchase original works by living artists can, over a period of 20 years, deduct from their taxable earnings an amount equal to the purchase price. To benefit from this deduction, the company must exhibit the acquired work in public.

Law n° 90-559 of 4 July 1990, relating to the creation of corporate foundations, authorises companies to set up cultural foundations and defines their scope of activity.

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