Spain: Cinemas accused of benefiting from VAT reduction

Private watchdog Facua has reported that only one in three exhibitors have passed on gains from a recent reduction, from 21% to 10%, in VAT tax on the value of movie tickets to consumers, submitting their report to the National Commission of Markets and Competition (CNMC) and requesting the agency to open an investigation into the matter.

In a survey conducted in August on 102 cinemas across the country, only 33 have passed the VAT reduction on the price of tickets on to consumers. Of the remainder, 36 have not reduced the final price of tickets (Ceordoba, Cuenca, Ciudad Real and Granada) and have even raised it, while 33 cinemas have reduced the amount by a lesser amount than the 11% reduction in VAT. Facua has accused the cinemas of having “taken advantage of the reduction in tax they had been clamoring for since 2012 to increase their profit margin, instead of transferring it to the viewers.”

According to the calculations presented by the association, if the reduction of VAT had been passed on to the final price in all cinemas, the average price of the ticket would be 6.86 euros, a drop of 69 cents. The complaint by Facua adds to the recent declarations by the minister of Culture, Jose Guirao, warning that it would review the reduction of the VAT if the measure was not accepted.

Full Content: El Economista

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