Tax incentives for cultural entrepreneurship

Governments encourage cultural entrepreneurship in various ways, including by so-called tax incentives. Tax incentives are tax benefits for certain persons or activities. Most well known in relation to cultural policy are tax incentives for donations. The design of these tax incentives varies between countries. Not only may domestic tax incentives for donations be important for cultural organizations,. being entrepreneurial might also imply fundraising abroad, in which case it is important to have knowledge on the availability of tax incentives for foreign donors. Tax incentives may not only enable fundraising in monetary terms, but also help in acquiring cultural heritage items. Such tax incentives include the possibility to pay tax with pre-eminent items of cultural heritage. As not all governments are transparent about these tax incentives and their results, cultural organizations can take the initiative in raising awareness of such incentives. As regards entrepreneurial activities in the more traditional sense, many countries offer tax incentives for commercial activities of cultural organizations in terms of profit taxes, value- added taxes and customs duties. This chapter makes the point that entrepreneurial cultural organizations should not only be aware of the availability of tax incentives, but actively include them in their fundraising strategy. At the same time, they must make sure that they remain within the boundaries of tax laws and do not give in to pressure from donors or artists to cross those borders, as that might lead to court cases and reputational damage.of