Avalara Taxrates > Blog > Sales Tax News > Spain: Buy a Carrot, Watch a Movie for Free - Avalara

Spain: Buy a Carrot, Watch a Movie for Free

  • Dec 10, 2012 | Gail Cole

It's no secret that Spain has financial troubles these days. The country's economy "has been shrinking for 15 months," and hopes for recovery are fading. According to the Organisation for Economic Cooperation and Development, "The [Spanish] economy is undergoing a prolonged recession… . The prospect of an immediate recovery remains remote." Little wonder, then, that the Spanish government is looking for creative ways to raise revenue.

What could be more creative than taxing the creative arts?

On September 1 of this year, the Spanish government raised the Value Added Tax (VAT) -- which is similar to a sales tax -- on such items as movie tickets, admissions to live music events, and similar entertainment. This is no small tax hike. The VAT rate increases range from 8% to 21%. (Variety).

In response, the Motion Picture Association, the Independent Film and TV Alliance, and nearly a dozen other international organizations are urging the Spanish government and a number of European parliament members to "recalibrate Spain's Value Added Tax (VAT) for cultural content and services." They argue that the tax hike is "damaging the cultural sectors concerned… ." and cite similar taxes in Portugal, where movie attendance has plunged 13%.

At least one theater owner is taking a unique approach to protesting the tax. Instead of selling movie tickets, Quim Marcé of Bescanó is selling carrots. One carrot costs the equivalent of $16 at his theater, but then, he explained, "we give away admission to our shows for free." Carrots are taxed at 4%; theater tickets are taxed at 21%. Some applaud the "Carrot Rebellion," as it has been dubbed by the Spanish media. Others call it tax evasion.

To date, however, the increased taxes have had little impact on the box office. In fact, movie ticket sales from October 1 through November 25 increased more than 25% over last year.

If you like Spain, carrots, and movies, you may be interested in taking up residency in Spain. With a couple hundred thousand dollars, you can. In an effort to rid the country of its housing surplus, the Spanish government is offering permanent residency to any foreigner willing to invest 160,000 Euros ($200,000) in Spanish real estate. Buy a home or apartment for at least that amount, and residency is yours. Then off to the movies you go.

photo credit: .michael.newman. via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.