Government set to reduce IVA tax on cinema tickets from 21% to 10%

  • Valud added tax on live events such as theatre and concerts was cut in June, but film remained at the top rate of 21%, causing discontent in the industry

As of the beginning of next year, cinema tickets will cost, on average, one euro less. This reduction in price was confirmed after the minister of Education, Culture and Sport, Íñigo Méndez de Vigo, announced last Friday that the IVA (value added tax) on cinema tickets will drop from 21% to 10% in 2018.

Until now, cinema was the only cultural activity that was still subjected to the increase in IVA that was levied upon cultural events in 2012 under the government of prime minister Mariano Rajoy. Last June, the IVA on all live events such as dance shows, theatre and music was lowered to the reduced rate of 10%, but the IVA on cinema tickets remained at 21%, sparking protests in the industry.

According to a study carried out by a consumer rights organisation (FACUA Madrid), the most expensive cinema in Spain, with a weekend rate of 10 euros, is in Barcelona. A cinema in Santander, Cantabria, is at the other end of the scale with a price of four euros. The average price for weekend tickets sits at 7.24 euros, while concession or loyalty card tickets come at an average of 6.41 euros. It is expected that general prices will drop to this lower rate of around 6.50 euros following the tax reduction next year.

Representatives of the industry considered the tax increase of 2012 a “punishment”, claiming that the sector was already at the point of economic collapse, with dozens of cinemas closing across the country. Nevertheless, the price increases have not affected sales in all areas of cinema. Spanish cinematography seems to have withstood the rises, and sales in this sector have endured the economic woes of the industry.

The government has promised to reduce the IVA by the beginning of next year.