France backtracks on artwork imports VAT rise
- 23 October 2013 | Richard Asquith
The French government has reversed plans to raise the French VAT rate on artwork imported from outside of the EU from the current 7% to 10%. It has instead announced a cut to 5% VAT from 1 January 2014. It had been announced in April 2013 that French VAT on artwork would rise.
Reduced French VAT rates on the rise
Like may EU countries, France has been looking to consolidate its numerous reduced VAT rates to comply with the EU VAT Directive. This only permits countries to have two reduced VAT rates in addition to the standard, higher rate. The current standard VAT rate in France is 19.6%. The French VAT rate is due to rise to 20% on 1 January 2014.
The Ministry of Finance had announced as part of this re-working of the French Value Added Tax regime that the art import tax rate would have to increase to the new 10% reduced rate. But this reversal has come as the art dealer network has campaigned to help ensure Paris retains is position as one of the most important art markets. For example, the UK VAT rate is 5% for imported art work. There is now import VAT in the US, where New York is the other major art world competitor to Paris.