Currently imports of art, collectables and antiques are subject to VAT in France at the rate of 5.5%. However, new laws planned to come into force by 2025 would increase this to 20%.
Art dealer and auction house groups are planning to lobby the French government to bring in exemptions for art and antiques and argue the “competitiveness of the French art market could be dramatically undermined by this European directive”.
The Comité Professionnel des Galeries d’art (CPGA) said the new laws would be “devastating on [France’s] art market, which has been growing rapidly since Brexit”. It added that if the changes went ahead “the only beneficiaries will be [France’s] main competitors, the US, the UK, Hong Kong and Switzerland”.
The tax changes are part of a European Directive on VAT rates which was adopted on April 5, 2022. The changes are designed to come into force on January 1, 2025, and be transposed into French law before December 31, 2024.
This directive involves significant changes to the VAT regimes, specifically changes to the VAT margin scheme, widely used by the art market.
CGPA said the EU’s directive was “without consultation with professionals or an impact study and will result in very serious – and probably irremediable – economic damage to the art market in France”.
CGPA and Syndicat National des Maisons de Ventes Volontaires (SYMEV) are two of the associations which are lobbying the French Ministry of Culture and Ministry of Finance for art market exemptions.
CPGA president Marion Papillon said it is “leading several actions to ensure that the directive in France allows the art market here to remain competitive and attractive. We have had meetings with the Ministry of Culture, the Counsellor of Culture of President Macron and meetings to come with Ministry of Finance.
“We are working with all the players in the sector, from artists and galleries to professional organisations representing antique dealers and auction houses, because we believe that they will all be impacted if the French art market, the most important in Europe, is affected.”