Tax Incentives for Cultural Investments: Why Other EU Member States Shouldn't Follow the Dutch Example

Abstract

For at least the last decade, governments throughout Europe have been interested in creating new tax incentives for the arts. Tax incentives for films have spread all over Europe, the French example of payment of inheritance tax with works of art has been followed by many European countries and some countries even have a special law on patronage which includes tax incentives for the arts. Recently, The Netherlands introduced tax incentives for cultural investments in the Income Tax Act ("ITA"). In this article I will discuss this incentive and the reason for introducing this incentive in the ITA. But more importantly, I will argue why other EU member states should not introduce similar tax incentives, as I question the success of the Dutch incentive.

Keywords: culture, tax law, personal income tax, tax incentives

JEL Classification: K34, H24