Last updated on July 1st, 2023 at 12:32 pm
In response to a new European Union tax directive that might significantly increase the cost of selling art in France, some 120 French artists wrote an op-ed published in Le Monde.
It may surprise some that artists and creative individuals would pick up a pen in response to such a move. In their letter, the signatories explained why this regulation poses a danger to the French cultural community if adopted into French law in its current form.
On April 5, 2022, the European Commission unanimously approved a new EU tax directive that will increase the import sales tax of products, including pieces of art, from 15% to 20% across all 27 EU member states. A “margin scheme” employed by French dealers to reduce the VAT paid on particular works would also be limited by the law. Few people paid attention to the passage of the VAT until a study on its massive effects on the French art and antiques market was released at the end of last month by the French business newspaper Les Echos.
According to the analysis, the VAT would have a devastating effect on the thriving French art sector, which saw an increase in global art sales from 3% of all transactions in 2001 to 7% in 2021. In the recent decade, major galleries like David Zwirner and Hauser & Wirth have opened locations in the French capital, and Art Basel’s first Paris+ event attracted around 40,000 visitors.
One reason France is so competitive is that it has the EU’s lowest import tax on art and antiquities at just 5.5%. Compared to other EU nations with substantial art economies, such as Germany (19%) and Spain (21%), this is a remarkably low tax.
The Comité Professionnel des Galeries d’art (CPGA) in France said in February that it would petition the French government to exempt the art gallery industry from the new VAT. The group also noted in a news release that the United States, Switzerland, Hong Kong, and the United Kingdom (which was positioned as the point of entry for international buyers to EU’s market before Brexit) would benefit greatly from the rule as they are France’s direct competitors in the art market.
In order to “shine in France, Europe, and the world,” the artists argued, “culture needs to circulate, to be shared.” Why are Europe and the United States, the country that pioneered the concept of the cultural exception, giving up their financial resources at a time when all the great powers are executing formidable strategies of cultural soft power?
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