The sale of works of art is subject to a specific VAT regime. The tax base but also the applicable rates depend on the quality of the seller but also on certain tax options taken by him.
Acquisition from the artist or his successors in title:
The sale of works of art (within the meaning of Article 98 A II of Annex 3 to the CGI) by the artist or his successors in title is subject, since 1 January 2015, to the reduced rate of 5, 5%. The artist liable to VAT may in return deduct from this collected VAT, the VAT deductible on his acquisitions.
Imports of works of art are also subject to the reduced rate of 5.5%.
Artists may benefit from a VAT exemption regime if their turnover does not exceed € 42,900 per calendar year. The franchise regime applies to original works produced by the artist, but also to limited reproductions, provided they are signed by the author and numbered. This regime does not apply to the sale of works of other persons, the artist then becoming a trader.
|Type of work or operation||VAT RATE|
Importing works of art, collectors’ items or antiques (from the European Union or not)
|Assignment of copyright (right of representation, reproduction, adaptation, exploitation) and interpretation||10 %|
|Sale of an original work by the author or his successors||5,5 %|
|Sale by a third party (art gallery, merchant, intermediary acting in its own name)||20 %|
|Sale of cultural property not considered a work of art:|
– Drawing of architect, engineer and other industrial, commercial, topographical,
– Hand-crafted item,
– Painted canvas for theater decors or studio backgrounds,
– Articles of jewelery, jewelery or goldsmiths’ wares,
– Piece of cabinetry more than 100 years of age (considered an object of antiquity),
– Photographic posthumous proof (not signed or authenticated by the artist).
Acquisition from an art gallery or any other intermediary:
In this case, there are several scenarios:
- If there is a lease of the gallery space
In this case, the artist alone assumes the costs of marketing his works (vernissage, advertising, etc …). Thus it is reputed to sell personally its works, the applicable VAT rate is therefore 5.5%.
- The gallery acts as commission agent
The taxable amount is equal to the total amount collected by the gallery, and the applicable VAT rate is 20%. The VAT is still owed by the artist who can deduct the VAT paid on the commission paid to the gallery.
- Gallery resells works previously purchased from an artist
The gallery is liable for VAT calculated on the sale price of the work to the final consumer, the applicable rate is 20%. It may also deduct the VAT paid on the acquisition of the work to the artist.
The gallery will also be able to opt for a VAT margin scheme: by this option the galleries can request that the VAT be collected only on the profit margin they realize. In this case, they nevertheless lose the right to deduct the VAT paid on the purchase price of the work.
Where it is not possible to determine precisely the purchase price of the transferred work, the galleries may, under certain conditions, calculate the margin at a flat rate by retaining 30% of the sale price, exclusive of taxes, for the work.
By Sandy Dalmas,
Cabinet Roche & Cie, Chartered accountant in Lyon, France