Boosting the creative sectors Daniel Friedlaender, IFPI 30 November daniel.friedlaender@ifpi.org

Overview Starting Point Country examples on initiatives European initiatives and taxation How to promote and protect culture

Starting Point Who am I? Global music info The music sector is traditionally the least subsidised of the creative sectors There are still different ideas on how to help the development of music and other creative sectors. EU recognises we are innovative sectors, contributing to European growth and jobs

National Initiatives Italy France South Korea Canada

Italy Italian Parliament introduced tax credits for record producers in 2007. Article 282 of the law Tax credit system Record companies are allowed to recuperate up to € 100,000 of their spending on new artists in a three year fixed period. Never implemented.

France: Tax credits Tax credit system for musical production. In 2010, value of €15 million for local production of 181. Growing yet far smaller than film funding. Government looking to kick-start local production Applies to EU artists signed in France

France Implemented by the DAVSI law of 2007. Companies can deduct costs The tax credit has conditions Has been consistently widened since its creation. The Government has recently announced that it would further expand the tax credit

France – AV sector Funding for AV sector: Since 2008, television broadcasters and ISPs in France also pay a tax on their broadcasting. In 2011, this tax generated over 322 million. Seen as a dynamic tax Based on heavy AV uses To fund local production

France – other programmes National Music Center (proposed) PUR government supported trustmark, supporting legitimate businesses

South Korea Government looking to support local copyright sectors by creating new structures and comprehensive plan “Copyright policy can provide cultural value to society only when it has dual aspects of rights protection and facilitation of the use of works.“ Looking at media convergence I-Cop and Special Judicial System Music market grown almost 50% in three years since changes in law

South Korea Boosting initiatives through education campaigns, reaching millions of Koreans Copyright education and public awareness Online education for schools, parents, teachers -portal.edu-copyright.or.kr “Our Star Defense Squad,” a Hands-on Copyright Awareness Campaign

South Korea Pro-active funding: Arts Council Korea Culture Voucher and Culture Welfare Programmes help low income families afford cultural products. Funding from National Lottery. Arts Support Programme Invests in production and creation of local content, promote it abroad Grants for rising artists – incubator to discover and promote young artists over several years.

Canada Film sector receives tax credits for incentive to invest. Telefilm Canada Developing, production, marketing, international, talent, festival funding programmes

Canada – potential changes Enhanced music tax credits , proposed at 25%. Would generate additional 1300 jobs, 280 million. Currently at 20% for emerging CA artists. Provincial and federal tax credits Ontario: tax credits for all film Production services credit 25% Music looking for wider opportunities. Help for export development, local production. Support for music education.

EU level VAT harmonisation VAT is an important factor in this activity and the current European VAT system continues to be burdensome for European businesses. It treats the music sector unfairly compared to other similar cultural sectors Comparable products should be treated equally

VAT harmonisation for EU? Reduced VAT rate Harmonise online and offline rates - Rates can differ by up to 10%. Luxembourg at 15%, Belgium 21%, Netherlands 21%, Denmark 25%

EU tax issues Current system places extra costs on business. Webshops selling physical products cross-border Taxation in country of origin Small business VAT exemptions EU consultation on taxation, VAT. Responses due by 5 January.

European Cultural Funding Many sectors, particularly audiovisual, can apply for grants under the European Culture Funding. Creative Europe:  more than €900 million in support of the cinema and audiovisual sector and close to € 500 million for culture http://ec.europa.eu/culture/creative-europe

The place of creators in the value chain Proposed laws in Germany and France on protecting content How to protect and promote culture in a digital world? EU wide copyright debate – important discussions on IP and the role of the creative sectors.