The director of the Tax Administration (SRI), Francisco Briones, provided clarification regarding artistic and cultural services and public events before the tax reform sent to the National Assembly in which the regime announced the abolition of the 12% value added tax (VAT) exemption.
Briones confirmed via Twitter that artistic and cultural services such as dance, theater or audiovisual production “are not” categorized as public events, which is why they “do not and will not pay VAT”.
The government presented a tax reform that aims to reduce the income tax of taxpayers and entrepreneurs
According to the official, public shows are considered entertainment and not “essential services or basic necessities such as medicine, food, medical care, etc. that are exempt from VAT”.
It is stated that currently the VAT paid by show organizers when hiring artists and for all the logistics involved in the event “is not reimbursed because they do not charge VAT on tickets, but pay it for these services. That VAT becomes a cost that we (them) now we eliminate”.
According to Briones, countries such as Colombia, Peru and Chile exempt from VAT mainly artistic and cultural events, but not public events.
Some key ideas about VAT on public shows:
1. Artistic and cultural services such as dance, theater or audiovisual production are EXCLUDED from this measure. They do not and will not pay VAT. pic.twitter.com/aqp5O6aqei
— Francisco Briones R. (@FcoBrionesR) May 12, 2023
The official states that the VAT rate in Ecuador at the regional level is “one of the lowest” and states that in Colombia this tax is 19%; in Peru 18%; and in Chile 19%.
Source: Eluniverso
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