VAT Regulations

New European Union regulations regarding the collection of VAT on digital services mean that eBay will begin collecting VAT on seller fees from July 1.

Scrap it or at least make life easier for the trade, new study demands: THE European Union should look again at the whole issue of Import VAT and art market red tape, say The European Fine Art Foundation.

PRESSURE from the British Art Market Federation has persuaded the Government to relax Import VAT rules on art that are thought to have damaged legitimate trade.

“Thank goodness he didn’t put up VAT”, said one dealer in response to Gordon Brown’s budget – the worst fears of the trade did not come true last week.

Echoes of the Kent County Council Bill can be discerned in changes announced to the VAT secondhand margin scheme (notice 718). Dealers who use a system called Global Accounting to calculate VAT on profit margins will have to keep a record of the names and addresses of sellers on purchase invoices – a main requirement of the Kent Bill – when the changes come into force on July 31 this year.

UK: CHANCELLOR Gordon Brown’s change in VAT policy for museums should safeguard free entry where it already exists.

UK: ART importer and exporter Ron Tabor says he believes the Trade has nothing to fear from Customs over the recent closure of the VAT loophole on re-imported works of art which appears to threaten those who inadvertently bring back works of art which have been recently exported from the UK.

UK: CUSTOMS and Excise have closed a tax loophole leaving UK art dealers with a hefty VAT bill to pay in future.

FRANCE: PIERRE Lellouche, député (MP) for the Drouot district of Paris, has called for the suppression of import VAT on art and a large cut in the rate of droit de suite, the artists’ resale levy.

UK: THERE was good news and bad news from the Treasury last week on the subject of art import VAT.

EU: THE publication on the Internet of the report compiled for the European Commission on the effect of doubling VAT on works of art imported for sale from outside the EC has exposed huge flaws in the Commission’s argument for pressing ahead with the increased tax, say leading members of the trade.

UK: BARRING an unexpected over-ruling by the Council of Ministers, the VAT charged on works of art imported to the UK from outside the European Union will double from 2.5 to five per cent on July 1.