Creaking Fests

The suspicion that the Croatian outdoor market couldn’t sustain as many as a dozen festivals is proving close to the mark as Burning Sea has been canceled and Terraneo appears to have financial problems.

Burning Sea has been wiped out by changes in the VAT law, something that Croatia Week believed may cause some festival promoters to shift their events abroad.

“Outlook Festival and Dimensions Music Festival, both of which are held annually in Pula, are on the verge of pulling out of Croatia if there are not changes to VAT laws,” the English-language paper reported.

The rates of VAT on concert tickets are 7 percent in Germany, 8.5 percent in Slovenia, and 9 percent in Austria.
“They changed it so that concert tickets and cultural events were no longer exempt from VAT, but had to pay 20 percent,” explained Burning Sea promoter Boban Milunovic, who had already sold 2,000 of the 6,000 tickets. “The Croatian government decided to charge an extra VAT of 25 percent to the regular ticket prices also for cultural associations.”

A note on the Burning Sea website explained, “Originally and until now, all of our calculations (e.g. Metalfest 2012) were made with 0 percent VAT due to cultural tax exceptions as stated on tickets as well.

“We are not able to buffer a 25 percent backup, so in the end there is no way for us to make the Burning Sea Festival into a business that is profitable – even if it sold out.”

Apparently the new law, which was effective immediately, faced such protest from the Croatian festivals that the rate of VAT has subsequently been cut to 5 percent for this summer’s events.

Milunovic had already switched King Diamond and Iced Earth, two of the main acts, to his Metaldays Festival, formerly known as Metalcamp.

Burning Sea ticket-holders are being offered free entry to Metaldays (July 21-27), although it’s a six-hour drive north from the Burning Sea site in Zadar.

Milunovic reckons Burning Sea has every chance of going ahead in 2014, but admits it may depend on the rate of VAT remaining at 5 percent.

The 3-year-old Terraneo Festival, which is on an old military base near the picturesque town of Šibenik, also appears to be in some trouble.

Official government financial department info shows the event – which is Aug. 7-9 and has My Bloody Valentine and Azealia Banks – has run up around euro 1 million debt in its first two years.

It wasn’t possible to get comment from Terraneo at press time.

In addition to Burning Sea and Terraneo, Croatia’s summer festival lineup also includes INmusic in Zagreb (June 24-26), Hideout Festival (July 3-5), Tisno’s Garden Festival (July 3-10) and Electric Elephant (11-15), Ultra Europe (July 12-13), Soundwave (July 19-23), Outlook (Aug. 29 to Sept. 2), and Dimensions (Sept. 5-9.)