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In the company of national actors and musicians, the President of the Republic Gabriel Boric Font, together with the Minister of Cultures, Arts and Heritage, Carolina Arredondo Marzán, promulgated this morning in La Moneda the VAT Exemption Law for Cultural Services .
This law establishes that the different forms of associations in the cultural, artistic and heritage sector may be exempt from VAT payment as long as they correspond to companies or companies that are made up exclusively of natural persons who effectively work in the provision of cultural services; that the total income received by the company from activities other than the provision of cultural services does not exceed 35% of its total gross income from the business; and that personal work predominates over the use of capital.
“I am glad that this law came out relatively quickly, through dialogue, listening, conversation, we managed to move it forward quickly and also retroactively, which is one of its important elements,” said President Gabriel Boric, who added that «It is important to recognize culture as work and not romanticize the precariousness in which cultural workers have historically lived. “We believe we are moving in that direction.”
“This measure is undoubtedly a benefit for the artistic and cultural sector, because it is also retroactive, so from May to date, the different associations will be able to manage the VAT that was charged on the different services provided.
What we are looking for with this is to reactivate the artistic and cultural sector, which was hit hard by the pandemic, but it is also important to understand the nature of the sector,” said the Minister of Cultures, Arts and Heritage, Carolina Arredondo.
This law arose from the coordinated work of the Ministries of Finance and of Cultures, Arts and Heritage, together with various union organizations from the world of culture to assimilate the tax treatment to which the provision of this type of activities was subject with the professional societies.
The working group focused on diagnosing and discussing the main tax problems of the sector and advancing the creation of a bill that would address sectoral demands.
In its parliamentary process, which began in July of this year, the project received indications incorporated into the Culture and Sports Commission of the Senate, which were approved by the Chamber of Deputies on October 4, the date on which the text was sent to Executive to be enacted as law.
“We are excited and encouraged by what is happening today: to have the facilities to be able to bring our culture in a better way and with better access to citizens, which is what we have always wanted,” said Héctor Noguera, representative of the artists at the ceremony.
About the law
The law defines cultural services as those directly linked to research, training, mediation, management, production, creation and dissemination of cultures, arts and heritage, among others, including activities related to audiovisual, musical and cultural production. of performing arts; exhibitions and interventions of visual arts and crafts; scenic works or montages; book publishing; seminars, talks, conferences and training workshops, related to cultural artistic activity. It also includes those activities that lead to knowledge, access, recognition, revitalization and safeguarding of heritage.
Likewise, cooperatives made up exclusively of natural persons will access this benefit, who must work effectively in the provision of cultural services; and non-profit entities such as corporations and foundations, functional community organizations, public interest organizations, trade associations, and associations of State Administration officials.
The Internal Revenue Service (SII) will be in charge of classifying a service as cultural, as well as supervising correct compliance with the requirements for the application of the exemption. To do this, you may request from the cultural associations the information you deem necessary, and from the Ministry of Culture, Arts and Heritage, a report on a particular activity for the purposes of being able to classify a service as cultural, which must be issued in a within 30 business days.
To access the benefit, cultural associations must register in an SII registry, which will come into force on January 1, 2024.
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