New policy: Encourage movie screenings to have low-priced tickets exempt from VAT

According to Time.com, the document "Regulations on Further Supporting the Development of Cultural Enterprises" published on the Chinese government website on December 25 stipulates that the income obtained by film production companies from the sale of film copies (including digital copies) and the transfer of copyrights, and the film distribution income obtained by film distribution companies are exempt from value-added tax.

In addition, the government encourages the arrangement of low-priced sessions or tickets in commercial performances and film screenings, and encourages online cultural operators to develop more low-cost businesses. Previously, the Notice on Several Economic Policies to Support the Development of Films, which was issued in 2014, stipulated that the income from the sale of film copies (including digital copies) and the transfer of copyrights by film production companies, the film distribution income obtained by film distribution companies, and the film screening income of film screening companies in rural areas were exempted from value-added tax from January 1, 2014 to December 31, 2018. According to the new notice, film distribution income will continue to be exempt from value-added tax.

More information about the cultural and film and television industry policies is as follows:

Fiscal and taxation aspects:

(I) The central and local governments should support the development of cultural enterprises through existing funding channels such as the special funds for cultural industry development, innovate funding methods, improve the policy support system, and

(II) The income from the sale of film copies (including digital copies) and the transfer of copyrights by film production companies, the film distribution income by film distribution companies, and the film screening income by film screening companies in rural areas are exempt from value-added tax. General taxpayers can choose to calculate and pay value-added tax in accordance with the simplified tax calculation method for urban film screening services in accordance with current policy regulations.

(III) Basic cable digital television viewing maintenance fees and rural cable television basic viewing fees collected by radio and television operating service enterprises are exempt from value-added tax.

(iv) Implement and improve preferential tax policies that are conducive to the creative production of cultural content and the operation of intangible cultural heritage projects.

(V) Increase support for key national cultural export enterprises and projects, and strengthen the construction of national cultural export bases.

(6) Increase financial support for cultural and technological innovation, incorporate cultural technology into relevant national science and technology development plans and programs, strengthen the construction of national demonstration bases for the integration of culture and technology, actively encourage the deep integration of culture and technology, promote the transformation and upgrading of cultural enterprises and cultural industries, and develop new cultural formats.

(VII) Through government purchases, consumer subsidies and other channels, guide and support cultural enterprises to provide more cultural products and services, encourage the publication of books and newspapers that meet the purchasing power of the masses, encourage the arrangement of low-priced sessions or tickets in commercial performances and film screenings , and encourage network cultural operators to develop more low-cost services. Increase investment in the construction and transformation of cultural consumption infrastructure, improve government investment methods, establish and improve social forces and social capital participation mechanisms, and promote the development of multi-level and multi-format cultural consumption facilities.

(8) Seriously implement relevant preferential policies to support the development of modern service industries, small and medium-sized enterprises, especially micro-enterprises, and promote the development of small and medium-sized cultural enterprises.