Movie ticket prices will remain unchanged for at least the next two or three years, even though the government will end a tax-exempt status for royalties earned from foreign films starting this month, a theater association said yesterday.
"Theaters and film distributors will absorb the costs and not [further] batter an already sagging box office" blamed on rampant pirating of movies, Michael Liao (
"We will maintain the current rates for the next two or three years," he said.
The Bureau of Taxation under the Ministry of Finance announced that starting this month, foreign films, which account for over 90 percent of the market, will no longer enjoy zero tax on their royalties, a preferential treatment that was granted in 1979 under pressure from major US film distributors.
The measure cuts into the nation's annual tax revenue by an estimated NT$30 million, and creates an unfair playing field with local films.
The change means that foreign films, or films marketed by foreign distributors, now need to pay 10 percent or 20 percent tax on their royalty income, or report business income tax after deducting 45 percent of income as costs, depending on whether the distributor has a local branch office or not.
If the costs were added into ticket prices for movies, cinema-goers might need to pay NT$300 for adult admission per movie, up from the current NT$250, Liao said.
Yang Kuo-yuan (
"Pirated DVDs, VCDs and online downloading have halved box office [revenues] in the local market from about 10 years ago," Yang said. "The tax will surely put another burden on us."
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