Italy’s Art Market Benefits from Reduced Taxes on Art

Italy’s Cultural Minister, Alessandro Giuli, announced that VAT, the value added tax on art, was cut by Italy’s government from 22 percent (the highest rate in Europe) to 5 percent. The high tax system was a hindrance to the Italian art world and drove the market to other European countries. As a result of reducing the tax, the Culture Ministry predicts the Italian art sector to produce €1.5 billion within three years and a long term increase approximated at €4.2 billion. The new tax rate matches those of Germany and France, 7 percent and 5.5 percent, which now allows the Italian art market to be more prosperous as compared to other countries in the European Union.

This change was made to revitalize the Italian art market and support cultural identity as well as artists, galleries, and auction houses. The VAT on imported art from countries outside the EU would also be reduced from 10 percent to 5 percent.

This change was led by the Apollo Group and the National Association of Modern and Contemporary Art Galleries who represented the art market and artists to successfully lobby the Italian government in support of this change. The benefits to artists will increase sales of their work and create pricing that is competitive internationally.