Preferential Tax and Procurement Policy for Culture and Creative Sector

Where
Georgia
When
2016
Who
Ministry of Culture and Monument Protection of Georgia
Ministry of Finance
Ministry of Economy
Key objectives of the measure:

The policy aims to support:

  • safeguarding cultural heritage monuments by encouraging activities related with its reconstruction and rehabilitation;
  • film industry in Georgia by encouraging local and foreign film productions to invest in Georgia;
  • arts education for children by encouraging education institutions to provide arts education services;
  • cultural institutions funded by the Ministry of Culture and Monument Protection: orchestras, ensembles, music centres, arts education institutions to improve creation, production and distribution of cultural goods and services;
Scope of the measure:
National, International
Nature of the measure:
legislative, regulatory
Main feature of the measure:

Government of Georgia has elaborated several financial mechanisms, in particular tax credits to support on the one hand the flow of cultural goods and services and on the other hand preservation of cultural resources. 

  • The Tax Code of Georgia provides VAT exemption for reconstruction activities on cultural heritage objects; in particular according to the c subparagraph, of 2nd paragraph of 168th article of the Tax Code of Georgia, “conducting restoration, rehabilitation, design and research works and activities by a person in agreement with the Ministry of Culture and Monument Protection of Georgia on cultural heritage that is part of the world heritage list and/or has the status of national heritage and/or is of cultic and religious purpose is exempt from VAT.
  • According to the 2nd paragraph of 168th article of the Tax Code of Georgia arts and sport educational services for children under 18 years are exempt from VAT;
  • According to the decree N 1149 issued by Government of Georgia in 2015, simplified procurement regulations apply to the following cultural institutions funded by the Ministry of Culture and Monument Protection: orchestras, ensembles, music centres, arts education institutions by encouraging creation, production and distribution of cultural goods and services;
  • In 2015, government of Georgia has introduced film industry incentive programme “Film in Georgia”, that envisages 20-25% cash rebate on qualified expenses incurred in Georgia for international as well as local production companies. This is the joint initiative of the Ministry of Economy and Sustainable Development of Georgia and Ministry of Culture and Monument Protection of Georgia. The scheme is implemented by the state agency - Enterprise Georgia.

The products eligible for cash rebate are as follows:

  • Feature film;
  • Internet/TV film;
  • Drama/Series, mini-series (including pilots);
  • Animated Film;
  • Reality Show;
  • Music Video.
Results expected through the implementation of the measure:

The number and quality of rehabilitated and restored cultural heritage monuments is increased. Qualified workers are motivated better to conduct restoration and rehabilitation works;

Film industry in Georgia develops. Co-productions, foreign production and investments grow together with country’s touristic potential and international visibility.

The number of educational institutions providing educational services to children as well as the  number of children receiving arts education is increased;

State cultural institutions are encouraged to create and provide competitive goods and services.

Financial resources allocated to implement the measure:

N/A

Goal(s) of UNESCO's 2005 Convention
Cultural Domain(s)
Multi-domain
Cultural Value Chain
Creation
Production
Distribution