VAT & Artworks: Updates on the 2024 Finance Law

• The Law of Finance 2024 introduces important reforms for art galleries, art agents, and antique dealers regarding VAT on art sales.
• Previously, these actors could purchase art at a reduced VAT rate of 5.5% and resell it with a VAT rate of 20% on the profit margin.
• The directive 2022/542 made it impossible to apply the VAT on margin mechanism when a reduced VAT rate was applied during the purchase.
• The government had two options to comply with the directive: apply a 5.5% VAT rate to both purchase and resale without the VAT on margin mechanism, or remove the reduced VAT rate and maintain the VAT on margin mechanism.
• The government seems to have chosen option 1 in the Law of Finance for 2024.
• The Law of Finance for 2024 extends the 5.5% VAT rate to all art sales, both purchase and resale, as long as the VAT on margin mechanism is not applied.
• The Law of Finance for 2024 also removes the VAT on margin mechanism for deliveries made by art galleries, agents, and dealers.
• These reforms aim to comply with the directive 2022/542 while keeping the French art sector competitive.

Source: mathez-formation.fr

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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