Nordic Industry Calls For Reduced Value-added Tax

STOCKHOLM‹The record industry here is putting a renewed effort behind the campaign to reduce the value-added tax (VAT) on music.
The major labels body Sveriges Skivbolag, the Swedish group of the International Federation of the Phonographic Industry (IFPI), says the need for such a reduction in the Nordic countries is particularly urgent due to the high levels of VAT levied here.
Indeed, the Nordic region has Europe's highest music-VAT levels: Sweden and Denmark levy tax at 25%, while Norway and Finland have rates of 23% and 21%, respectively.
Sweden's minister of culture, Marita Ulvskog, says, "The [ruling] Social Democrats are in favor of reducing the VAT level, but in a practical sense we can't decide this for ourselves."
She notes that the European Union determines which goods are deemed to be cultural items‹and therefore subject to a lower or zero rate of VAT‹and which goods are excluded from this reduced band. Ulvskog cites books and cinema and theater tickets as cultural goods but noted that neither music nor video products are deemed to be cultural goods.
"Understandably," Ulvskog adds, "with the introduction of the new European currency, the euro, the finance ministers might have a different agenda than the one of the music industry." However, the Swedish IFPI group is pushing hard through the organization's European affairs office in Brussels.
IFPI Sweden managing director Lars Gustafsson says, "There is one possibility to have the VAT rate reduced. There is something called a cultural VAT rate of 6%, which applies to cinema, theater, and concerts and even performances in media of copyrighted works. When [public TV/radio broadcasting company] Sveriges Radio pays remuneration for their use of music to [Swedish authors body] STIM and IFPI, they pay only 6%."