Any sale of works of art is subject to a VAT regime, which varies according to the quality of the seller and his tax options.
I bought a work from the artist or his rightful holders …
Since January 1, 2015, sale of works of art by the artist or his rights holders is subject to a VAT rate whose rate has been reduced to 5.5%. In return, the subject artist will be able to deduct VAT from VAT, the VAT deductible on his acquisitions.
The importation of work is subject vat rate of 5.5%.
Artists subject to VAT benefit from the VAT-free scheme and are, therefore, exempt from filing returns and settling this tax, when they have achieved a figure in the previous calendar year tax-free business fees of no more than 42,900 euros.
The deductible scheme does not apply original works signed by the author and some reproductions signed by the author and numbered.
The deductible scheme does not does not apply to the sale of other people’s works.
There are three VAT rates applicable according to the transactions carried out (operations defined in Article 98 A of Schedule III of the General Tax Code), namely:
- the reduced rate of 5.5% (as of January 1, 2015, cf. Art. 2778-0 bis, I of CGI): – Imports of works of art (from the European Union or not). – Sales of works of art made by their author or rights holders.
- intermediate rate 10% (Art. 278 septies and follow-up CGI): – Copyright assignments (heritage rights) – Occasional deliveries of works of art companies that have used them in the course of their business and have been entitled to vat deduction.
- The standard rate of 20% : – Sales made by a third party (e.g. art gallery, dealer) – The sale of a cultural property not considered a work of art.
I bought a work in a gallery …
If the artist has signed a contract to rent the gallery space, the VAT rate will be reduced to 5.5% because he alone pays the marketing costs and sells his works directly to the public.
If the gallery acts as a intermediary in the sale and collects a commission on sales VAT rate is 20%. VAT is paid by the artist who can in return deduct it from the commission paid to the gallery.
Note that the tax base is equal to the total amount collected by the gallery.
Finally, gallery that resells works it has previously purchased from an artist is subject to a 20% VAT rate VAT is calculated on the sale price to the public.
However, the gallery can request that VAT be collected on the profit margin it collects Realize. The main drawback of the margin VAT regime is the the gallery loses the right to deduct VAT paid on the price purchase of the work.
When it is difficult to determine precisely the purchase price paid to the seller or when the price is not significant, the VAT tax base can be calculated on a flat-rate margin of 30% of the duty-free selling price.
Contact us for more information on the challenge of artwork.