Italy will reduce value-added tax (VAT) on art sales from 22% to 5%, following approval of the change in a cabinet meeting on June 20th. The amended VAT rate went into effect last week; however, it still must be ratified by the Italian parliament within 60 days.
The adjusted rate was announced by the culture minister, Alessandro Giuli, after the Italian government faced consistent pressure from Italian galleries, artists, auction houses, and other art market players. Italy’s previous VAT rate, in effect since 2013, was the highest in the European Union. Its new rate is the lowest in the E.U.
Italy’s VAT on art has long been a point of contention. The 22% rate was notably higher than Germany’s 7% rate or France’s 5.5% rate, placing Italian galleries at a competitive disadvantage. According to a study by Nomisma, a market consulting firm, the cut could generate €1.5 billion ($1.76 billion) in art market turnover and boost Italy’s economy by as much as €4.2 billion ($4.94 billion) within three years.
At April’s miart fair in Milan, dealers circulated an open letter to Prime Minister Giorgia Meloni warning that the high tax risked turning Italy into a “cultural desert.” The Apollo Group, an association of Italian art organizations, also called on the government to lower VAT for the sale of art. The group warned that if the country didn’t address the high VAT, then “any collector who wanted to import or buy work in the European Union would certainly not do so in Italy,” a letter from the Apollo Group read.
Until recently, Meloni’s government had rejected calls for reform, saying it would not respond to pressure from wealthy collectors.
"It’s a momentous turning point," Sirio Ortolani, the president of ANGAMC (National Association of Modern and Contemporary Art Galleries) and vice president of the Apollo Group, told The Art Newspaper. “Italy can finally become a great international hub, attracting galleries from all over Europe and major fairs."
The tax change comes as the global art market continues to contract. According to the 2025 Art Basel and UBS Art Market Report, global art sales fell by 12% in 2024 to an estimated $57.5 billion. Italy experienced a 10% decline in the same period.
from Artsy News https://ift.tt/Tx3yb6n
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