European music sector urges EU Finance Ministers to reduce VAT on sound recordings

SEE ALSO

Stresa, September 12th-13 th, 2003

The European music sector urged Member States to seize the opportunity to reduce VAT on sound recordings, as EU Finance Ministers attended an informal meeting in Stresa, Italy. VAT on sound recordings is currently set at between 15% and 25%, while other cultural products such as books, magazines, newspapers, entrance tickets to cinemas, theatres and concerts benefit from reduced rates upwards of 5%. Organisations from across the sector have united to call for an end to this blatant cultural discrimination against music.

Despite evidence of the benefits of a VAT reduction for EU consumers and the entire music sector, the European Commission failed to include sound recordings in its July 2003 proposal on reduced VAT rates. However, the final decision lies with the EU Finance Ministers who were scheduled to discuss the issue of reduced VAT rates in Stresa.

Patrick Zelnik, President of Naïve SA, French independent record label, said: "The European Commission is ignoring the cultural status of musical artists and the vital role they play in European culture. This is a fundamental denial of Member States' right to pursue their own cultural and fiscal policies, and a mockery of the new language in the draft constitution of the European Union to promote cultural diversity."

Entertainment retailers and record companies have given a public undertaking to maximise the benefits of a VAT reduction for European consumers, making the incredible diversity of European music more accessible for everybody.

Richard Constant, General Counsel of Universal Music International, said: "There is no logical explanation for the discrimination between the treatment of sound recordings and other cultural products. It makes absolutely no sense. A VAT reduction would show that the EU is willing to do something positive for consumers and particularly for young people who have a very close affinity with music."

A VAT Coalition* comprising representatives of authors, composers, music publishers, performing artists, artist managers, independent and major record companies, entertainment retailers and collective management societies, was set up to express the consolidated view of the European music sector during the review of the 6th VAT Directive. Their position has the backing of over 1,300 European artists and composers who have signed petitions calling for a VAT reduction on sound recordings. Signatories include: Roberto Alagna, Cecilia Bartoli, Andrea Bocelli, Pierre Boulez, Patrick Bruel, Carla Bruni, Chris de Burgh, Johnny Hallyday, Julio Iglesias, Elton John, Eros Ramazzotti, Axelle Red, Nana Mouskouri and Anne-Sophie Mutter. The full list of artists and composers supporting this campaign can be seen at www.givemusicabreak.com

A five-country survey, carried out by research agency Martin Hamblin GfK (December 2002), indicated that a VAT reduction on sound recordings would give a significant boost to the recorded music market in Europe. A number of EU governments have already expressed the wish to treat sound recordings as cultural goods from a VAT viewpoint.

*The VAT Coalition comprises:

EMO - European Music Office,
GERA-EUROPE, Global Entertainment Retail Association-Europe
GESAC, European Group of Societies of Authors and Composers
GIART, International Organisation of Performing Artists
ICMP/CIEM, International Confederation of Music Publishers
IFPI, Representing the recording industry worldwide
IMMF, International Music Managers Forum
IMPA, International Music Publishers Association
IMPALA , Independent Music Companies Association

For further information, please contact:
Francine Cunningham, IFPI, Tel: +32 (0)2 511 92 08,
Mobile: +32 478 261995 , E-Mail: francine.cunningham@ifpi.org;
or Gabrielle Guallar, Impala, Tel +32 (0)2 289 26 00,
E-Mail: gguallar@kernnet.com