Tax Incentives Crossing Borders

Abstract

Many countries grant tax incentives for charitable gifts. These incentives, however, are not unambiguous in the case of cross-border gifts. Yet, potential donors to the creative industries have expanded across countries, providing fundraising opportunities outside the arts organization’s country of residence. Although this provides opportunities for the creative industries, governments often have not anticipated this. In many countries, tax incentives for gifts to arts organizations remain a domestic issue. This creates tax barriers to raising funds abroad for arts organizations, as they face unequal competition with domestic arts organizations. Governments and private initiatives can overcome the tax barriers for cross-border charitable gifts. This chapter provides an overview of the current solutions that have been initiated by states and solutions initiated by private organizations in accordance with legislation. Furthermore, the crucial factors that influence the effectiveness of these solutions are indicated. The solutions are applicable to cross-border situations in general, but are illustrated through examples derived from the Netherlands.