German Art Galleries Block EU VAT Rise

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Germany’s Bundesverband Deutscher Galerien und Kunsth√§ndler (BDGV)- the country’s federal association of galleries and dealers-has stifled the European Commission’s effort to raise the value-added tax (VAT) on the purchase of original works of art. But it may be a delay rather than a stop of the commission’s on-going effort to increase VAT.

Stacks of coins with the letters VAT isolated on white backgroundAccording to The Art Newspaper:

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The European Commission has been trying to raise German VAT tax on original works of art from 7% to 19% to bring it in line with higher VAT rates in the rest of Europe. The move is widely opposed by the art world as well as the German minister of culture, Bernd Neumann. The BDGV, working with cultural and economic policy experts as well as institutions, has been campaigning against this and recently blocked the approval process, making it unlikely that there will be a rise in the VAT this year…

…The tax would not affect imports, which will still be subject to a reduced VAT rate of 7% if they are “original” and a full rate if they are editioned works, such as photographs or video. Primary market sales, between artists and buyers, will still benefit from the reduced rate of 7%, meaning that a collector would pay 19% for a work from a gallery, but only 7% for the same work bought directly from the artist. According to [No first name given] Sturm, “gallerists are worried about this point because the difference in price is notable. However, they hope the artists will show solidarity. Moreover, collectors usually buy from galleries because they are guarantees of quality, value and the importance of the artists on the market.”

The federal assembly will again discuss the potential increase in VAT at its June 4 meeting.