A new system of taxation for foreign films has been proposed in Russia

Deputy of Russian state duma from political party “Fair Russia” has proposed new system of taxation for foreign films. The rates of “progressive profits tax” would depend on quantity of cinemas where foreign films are showed. In case if film is showed in 80-100% of cinemas in country the rate would be 20%, in a case of 60-80% the rate would be 15%, in a case of 40-60% the rate would be 10%, in a case of 20-40% the rate would be 5, in a case of less than 20% the rate would be 0%.

Prior to initiative on this “progressive taxation” of foreign films, also were proposed quotas for Russian films and some changes to VAT taxation for tickets. Introduction of VAT from sale of tickets would cause increase of tickets prices and reduce the quantity of viewers. In crisis many people wouldn’t buy tickets at high prices. Quotas for Russian films also are not good idea, especially for small cinemas making money on foreign films. Therefore, in order to avoid introduction of quotas for Russian films and VAT on tickets, progressive taxation has been proposed. Such taxation would protect films, so called art-house, including those produced abroad. Tickets price wouldn’t increase and viewer wouldn’t suffer and only western corporations would pay taxes. Hollywood companies wouldn’t notice additional tax burden. It is “not so heavy”. But for Russian movie industry such system will be like helping hand; Russian movie production would get additional financial stimulus and support and Russian directors can have more opportunities for their creative efforts.