Gallery Review Europe Blog European Fine art Italy could slash VAT on imported works of art
European Fine art

Italy could slash VAT on imported works of art


Italy is poised to slash VAT rates on art imports to 5.5% in an effort to turn the country into a major competitor in the global art market. Italy currently applies a reduced VAT rate of 10% on art imports, which is higher than those in France (5.5%), Belgium (6%) and Germany (7%). The proposal follows the revision of a 2006 European Commission directive that aims to better align VAT systems among member states. The revised directive—which proposes member states reduce VAT in specific commercial categories, “to preserve the functioning of the internal market and to avoid distortions of competition”—allows EU countries to lower VAT on art imports to a minimum of 5%, if the government chooses to adopt it.

From 10% to 5.5%

The revised directive, which was first published on 5 April 2022, now lists “works of art, collectors’ items and antiques” among the 29 commercial categories eligible for further VAT reductions. In addition to art imports, the revised document allows for VAT reductions to be applied to the entire commercial chain, so including primary and secondary market sales of works of art by artists and galleries within the EU. Member states are
asked to apply the changes with national laws by 1 January 2025.

Vittorio Sgarbi, an undersecretary in the culture ministry, has recently met Maurizio Leo, the deputy minister for finance and economy, to discuss the changes, the Italian newspaper Il Sole 24 Ore reports. “The government intends to adopt the EU directive and reduce VAT on the importation of works of art from 10 to 5.5%,” Sgarbi reportedly told the newspaper.

Jose Graci, the director of the Turin- and London-based Mazzoleni gallery, tells The Art Newspaper that both collectors and Italian galleries—which acquire roughly half of Modern and contemporary works from foreign suppliers, he says—would benefit from the change.

Franco Broccardi, a partner of Milan’s BBS-Lombard tax consultancy who advises Federculture, a group of Italian cultural organisations, says: “This would help us create a truly competitive market for art in Italy.” He adds that the change would “send a signal” that the country intends to prioritise its art market.

Broccardi and Federculture submitted proposals to the culture ministry in March recommending that the government apply the VAT reductions to art. “The government has listened carefully,” Broccardi says. “We may not need to wait very long [for the change].”

Thanks in part to its low 5.5% VAT rate on art, France currently commands 7% of the global art market, making it the world’s fourth biggest player and the biggest in the EU, according to the Art Market 2023 report compiled by Art Basel and UBS. Italy, by contrast, does not feature in the world’s top nine countries for market share.

Thaddaeus Ropac, the founder of the eponymous gallery brand, recently told The Art Newspaper that the EU tax directive “would be fatal” for France’s art market if its government decides not to continue applying reduced VAT to art. In that event, France would lose its competitive advantage to other states that do take up the VAT reduction on art (potentially including Italy). Italy’s Ministry of Economy and Finance declined to comment on whether it would adopt the changes.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Exit mobile version