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Monday, November 12, 2012

To Avoid 21% Ticket Tax, Theater Sells $16 Carrots, Gives Away Free Tickets

CarrotsWGBH:  To Get Around Tax Hike, Spanish Theater Sells Carrots Not Tickets:

In Spain, new austerity measures mean higher sales tax on everything from beer and wine to clothing and movie tickets. But in Bescanó, a small town in the country's northeast, the local theater director has come up with a rather creative way to get around a new 21% tax on tickets for plays at his theater –- by selling carrots instead.

"We sell one carrot, which costs 13 euros [$16] -– very expensive for a carrot. But then we give away admission to our shows for free," he explains in Spanish. "So we end up paying 4% tax on the carrot, rather than 21%, which is the government's new tax rate for theater tickets." ...

Spanish media have dubbed this the "Carrot Rebellion," and the Bescanó theater has won kudos from arts advocates nationwide. Shows are sold out.

But the theater must also follow the law, says Fernando Fernandez, an economist at Madrid's IE Business School. "This is called tax evasion," says Fernandez. ... 

Marcé, the theater director, says he consulted a lawyer before launching his carrot sales. He's got backing from the local mayor too. And no one has stopped him so far.

(Hat Tip: Mike Talbert.)

http://taxprof.typepad.com/taxprof_blog/2012/11/to-avoid-21.html

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