According to gallery owners, the Culture DL is likely to deal the death blow to the Italian market: why?

The government’s decision not to reduce VAT on art imports and transactions is a very hard blow to the Italian art market: ANGAMC - Associazione Nazionale Gallerie d’Arte Moderna e Contemporanea (National Association of Modern and Contemporary Art Galleries ) and Gruppo Apollo, two of the main trade associations, firmly denounce it, speaking of a “coup de grace” for the Italian art market, which has already been in difficulty for some time.

Italy, the associations argue, risks exiting the international market, unable to compete with European countries that have instead taken advantage of Directive (EU) 2022/542 to lower rates. While in Germany VAT on art is at 7 percent and in France 5.5 percent, in our country it remains set at 22 percent, a gap that makes trade prohibitive and penalizes the entire supply chain, from artists to gallery owners, restorers to artisans. Of the issue, those in the trade have been debating for some time: as early as 2021, gallery owners asked then culture minister Franceschini to lower VAT on art.

What does Directive 2022/542 of April 5, 2022 provide for? This is an amendment to European VAT (Value Added Tax) legislation: the directive includes the “supply of works of art, antiques or collectibles” in the categories of goods or services that may be subject to reduced VAT. However, each EU member state can apply reduced rates to up to 24 categories out of the 29 provided for in the directive(more on how VAT on works of art works here). France and Germany have already applied reduced VAT to works of art, and it seemed that Italy could also move in this direction: last July, for example, Alessandro Amorese and Saverio Congedo of FdI put forward a bill to apply reduced rates, an initiative that was supposed to spur the government to introduce the reduction in the DL cultura. And indeed, such a measure was expected, but it did not arrive.

The effect, according to ANGAMC and Apollo Group, is already evident: many activities are moving their headquarters abroad, where tax regimes are more advantageous. A phenomenon that impoverishes the Italian cultural system, driving away investors and collectors, with negative repercussions on the entire sector. “We cannot ignore the consequences that this non-alignment produces on the entire art supply chain: artists, academies and training centers, restorers, artisans, and the fundamental sector of fairs,” the two associations write in their note.

In addition to the tax issue, ANGAMC and Apollo Group also point the finger at the rules governing the movement of works of art (here is a lengthy in-depth look at what rules are in place in Italy and many other countries). While in other European countries the threshold value for unrestricted export is set at 300,000 euros, in Italy the figure is drastically lower: 13,500 euros for any artistic or antique good over 70 years old, excluding only archaeological finds. This bureaucratic limit, according to the associations, makes the Italian market even less competitive, increasing difficulties for collectors and operators.

The request to the government is clear: intervene urgently to save a sector that is in danger of collapsing. “We have been waiting a long time for these vital measures for our sector. It is therefore necessary to intervene now with the utmost urgency through measures capable of interrupting this spiral that puts the art sector and the country’s entire cultural system at risk,” the associations stress. If this downward spiral is not ended, the concrete risk, according to the associations, is the devaluation of Italian art and operators on the international scene.

According to gallery owners, the Culture DL is likely to deal the death blow to the Italian market: why?

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