The French art world has welcomed their government’s decision to cut, rather than increase, the rate on tax for works imported in to France from outside the EU.
French députés voted the U-turn on October
18, reducing import VAT from 7% to 5.5% - closer to the rate
currently charged in the UK (5%). The government had previously
proposed raising the import tax rate from 7% to 10% with the rise
due in January 2014.
A report published by Guillaume Cerutti,
chief executive of Sotheby's Paris, the Paris dealer Franck Prazan
and Georges-Philippe Vallois, the president of the French galleries
association, had concluded the tax rise would have had "disastrous
consequences for the French art market".
To offset the reduction in import VAT,
députés voted to increase capital gains tax on art (the
so-calledtaxe forfaitaire applied to the total resale
price) from 5% to 6.5%.
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