EU Court Rules Art Galleries Can Pay VAT on Margin for First Market Introduction

• Art galleries can pay VAT on their margin even if they purchase artwork from a company controlled by the artist who created the work.
• The condition is that it must be the first introduction of the artwork to the EU market, as ruled by the Court of Justice of the EU.
• The dispute involved the application of articles 311 to 316 of the EU VAT directive.
• According to these rules, a seller of artwork can pay tax on their margin if they bought the work from a non-taxpayer or a VAT taxpayer for whom the transaction is tax-exempt.
• The seller should generally be the creator of the work or their legal successor.
• In this case, a French gallery bought paintings from a British company with the artist as a partner and sold them using the VAT margin scheme.

Source: podatki.gazetaprawna.pl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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