- The European Court of Justice clarified VAT rules for first sales of art under the EU’s special margin scheme.
- The ruling applies to works of art supplied by creators or their successors through a legal entity.
- The supply must be attributable to the creator or successors and be the first introduction to the EU market.
- Article 316(1) of the VAT Directive allows taxable dealers to use the margin scheme for certain transactions.
- The margin scheme requires VAT payment only on the profit margin, with no input tax reclaim.
- The case involved an art gallery, GKG, audited for applying the margin scheme to works by Gideon Rubin.
- The court ruled that excluding legal entities from the scheme would undermine its objectives and distort competition.
Source: answerconnect.cch.com
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.
