Promotion and boosting of entrepreneurship, and cultural and creative industries.
The policy for promoting, encouraging and fostering artistic creation, production, distribution and cultural and creative enterprises and industries was strengthened through the Organic Law of Culture. Precisely, the promotion and dynamization of free creation in general, and others with more specific objectives such as the design of "incentives and stimuli for individuals, institutions, enterprises and the media to invest, promote, support, develop and finance cultural activities." are among the powers agreed upon for the Arts and Innovation Subsystem. The way of conceiving the Subsystem seeks to strengthen its role in generating an ecosystem that allows the underpinning of the country's cultural and creative enterprises and industries. This has been reaffirmed with the recognition of the processes of creation, production and circulation within the framework of the 2017-2021 "Toda una vida" (A Lifetime) National Development Plan.
The aim is to establish the material and structural conditions that enable cultural development through intense coordination with other sectors of the economy and objective consolidation of the enterprises and industries associated with it. The 2017-2021 "Toda una Vida" National Development Plan foresees that the contribution of culture to GDP will reach 3.5% by 2021. To achieve this goal, efforts have been made to implement a series of different measures and to implement a comprehensive promotion program for arts and culture.
In this sense, in 2019, the "Ecuador Creativo" (Creati Ecuador) Comprehensive Plan for the Promotion of Cultural and Creative Industries was launched, which was assembled using different strategies and actions that allow the repositioning of the country's creative economy. The Plan was based mainly on the implementation of pending mechanisms and the deepening of certain measures with varying degrees of implementation, especially of an economic nature, within the framework of the Organic Law of Culture. Article 114 of the Law recognizes art and culture as a priority sector of the economy, this for "purposes of the application of the tax incentives provided for in the national legislation, in accordance with the Law of Internal Tax Regime". Article 118 also lists these incentives, which enable:
1. Deductibility of personal expenses in art and culture for the revenue tax.
2. Introduction of incentives for sponsorship, promotion and advertising of artistic and cultural goods, services, activities and events.
3. Exemption from taxes on foreign trade in imported artistic and cultural goods;
4. Among others.
Thus, and on this normative basis, the Comprehensive Plan for the Promotion of Cultural and Creative Industries "Ecuador Creativo" proposed to make possible measures such as: (i) a 0% value added tax for the provision of certain artistic and cultural services, (ii) differentiated credits for artists and cultural managers "Impulso Cultura" (Culture Boost); (iii) compliance with article 119 of the Organic Law of Culture which establishes equality criteria in the hiring of national artists for the institutions of the National Culture System; (iv) exemptions from taxes on foreign trade in cultural goods and inputs; (v) return of 50% of the VAT paid for the development of activities related to the audiovisual industry, among others.
Through the application of these public policy approaches, and through the launch of a Comprehensive Plan for the Promotion of Cultural and Creative Industries "Ecuador Creativo", cultural and creative industries have been considered and recognized as economic activities relevant to the growth and development of the country, and, therefore, vital to the establishment of programs that promote its momentum and consolidation from governance. In particular, important measures of a tax economic nature have been implemented, such as:
1. The implementation of a measure aimed at ensuring that "cultural goods and services" defined in Article 34 of the regulations of the Organic Law of Internal Tax Regime are considered personal expenses deductible for revenue tax purposes. This has contributed to a reinvigoration of cultural consumption nationwide.
2. The repositioning of Article 119 of the Organic Law of Culture, which states that all institutions comprising the National Culture System, and that invest in the hiring of foreign artists, shows or groups, are obliged to channel at least fifty percent (50%) of the said amount for the hiring of national artists, groups and shows.
3. Since 2019, the artistic and cultural services described in Executive Decree No 829, published in the Appendix of Official Gazette No13 are taxed with 0% VAT. This became a direct stimulus to the demand associated with such services. These services are:
a. Museum pre-production, production and assembly.
b. Musical composition or sculpture.
c. Organization, production and presentation of artistic and cultural performances.
d. Audiovisual pre-production, production and post-production.
e. Composition, editing, pre-production, production and post-production services in the musical, phonographic and sound fields.
f. Recording of live artistic and cultural activities.
g. Library or librarian services
h. Book publishing, publishing, translation, printing and marketing.
i. Specialized photography.
j. Research services related to culture, arts, heritage and social memory.
4. In 2019, plans for inter-agency cooperation between the Ministry of Culture and Heritage and the public banking sector (BANECUADOR B.P) were established, and through the signing of a Framework Agreement, the design, instrumentalization and promotion of credit products focused on the specificities of the promotion and the development of Art and Culture were enabled. Thus, through this initiative "Impulso Cultura", a specific allocation product was launched, which until the end of 2019 achieved:
* 140 Artists and cultural managers trained in Business Planning.
* US$ 19,000.00 allocated for "Impulso Cultura" microcredit.
* US$ 264,000.00 allocated for the artistic and cultural activities microcredit segment.
5. Since August 2019, and through Ministerial Agreement No. DM-2019-147, the import of certain cultural goods and inputs is allowed and exempt from foreign trade taxes. The incentive is aimed at natural or legal persons registered in the Unique Record of Artists and Cultural Managers (RUAC, in Spanish).
6. The Law of Productive Promotion, Investment Attraction, Employment Generation and Stability and Tax Balance, published in Official Gazette Appendix 309 of August 21, 2018 allows for the refund of 50% of the VAT paid on development, pre-production and post-production expenses in audiovisual, television and cinema production activities.
7. Article 22 of the Law of Internal Tax Regime, in Official Gazette Appendix 463, amended on August 21, 2018, and the Law of Tax Simplification and Progressivity allow the deductibility of up to 150% in the Revenue Tax payment of those companies that contribute resources to the organization and sponsorship of artistic and cultural events.
8. Article 10 of the Tax Simplification and Progressivity Law anticipates the revenue tax exemption, for certain periods, for new and productive investments for companies engaged in the provision of artistic and cultural services.
All of these initiatives are in the implementation process and evaluation exercises are pending.
|Nom du partenaire||Type d'entité|
Internal Revenue Services (SRI, in Spanish)
National Customs Service of Ecuador
Presidency of the Republic
Banecuador- Banco del Pueblo
Decentralized Autonomous Governments
Several private sector companies and institutions