1. Tax incentives as a measure to support the arts in a globalizing world
ACEI 2014
Tax incentives as a measure to support the arts in a globalizing world
Renate Buijze
27 June 2014

2. 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

3. 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?

4. 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

5. 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?

6. Existing solutions State solutions:
Unilateral solution: removal of geographical restrictions
Bilateral solution: bilateral tax treaties
Multilateral solutions:
Treaty on the Functioning of the EU as enforced by European Court of Justice
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

7. 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

8. Questions & comments?
SSRN: papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=
Are there any more questions?
Thank you for the attention.

9. 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?