ALEXIA WALKER: How tax regimes worldwide affect the art market
There are no customs duties to bring art into the country, but the calculation of import VAT remains perplexing
The growth of the art market is tightly linked to tax regulations. Policies relating to import VAT, tax incentives and artists’ resale rights have a profound effect on the art trade. According to cultural economist Clare McAndrew, there is a growing perception that Europe has become an expensive and complex place to transact. This explains why, after the 2009 economic contraction, the recovery in the UK has been slower than in the US. The looming possibility of a no-deal Brexit will have further impact. In a report on private art museums, the US and Germany boast, respectively, 48 and 45 private museums out of 350 worldwide in 46 countries. The art market knowledge company Larry’s List points to favourable tax breaks in both countries that encourage collectors to build museums and share their art with the public. The US tax regime also favours private donations to museums. Collectors can deduct from their income tax the fair market value of an artwork at the time of a donation witho...
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