Convelio: Art Transport & VAT Guide 2025 | EU & International

Key Takeaways: Art & VAT Rules in 2025

• VAT impacts all art sales, imports, and transport from gallery pricing to cross-border shipping.
• Thresholds vary by country: UK £90K, France €85.8K, Germany €50K (projected).
• Reduced VAT rates now apply in many EU countries (France 5.5%, Germany 7%, Italy 5%).
• Margin Scheme changes in 2025: No longer compatible with reduced import VAT rates.
• E-invoicing mandates begin in 2026, now is the time to prepare.

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Why VAT Matters in the Art Market

VAT, a consumption tax, is charged at every stage of a product's journey to the final consumer. For art market professionals, this means you act as an intermediary: collecting VAT from your customers and remitting it to the government.

Expert tip: "VAT affects everything from your studio costs to how much a collector pays for your work," explains a senior advisor at Convelio. "Once you cross a certain sales threshold in your country, VAT registration becomes mandatory. But even before then, registering voluntarily can help you recover VAT on your business expenses and build credibility with clients."

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When You Need to Register: Thresholds and Strategic Benefits

Each EU country sets its own specific turnover threshold for mandatory VAT registration. As of July 2025:

• United Kingdom: £90,000 (increased from £85,000 in April 2024)
• France: €85,800
• Germany: €22,000 (previous year) or €50,000 (current year projection)
• Italy: €65,000
• Netherlands: €20,000
• Denmark: DKK 300,000 (approximately €40,000)

The VAT registration threshold for artists varies between countries, such as £85,000 in the UK for goods and €37,500 for services in Ireland.

Expert tip: "Voluntary registration before you hit the limit can be a strategic move. It enables you to reclaim input VAT on significant business expenses like studio rent, materials, and crucial art transport and insurance costs. This can greatly improve your cash flow and access to specialized VAT schemes." — Julien Lacroix, US Operations General Manager, Convelio

VAT Rates on Art: A European Snapshot

Most European countries apply a standard VAT rate to general goods and services, such as 20% in France and the UK, 19% in Germany, and 25% in Denmark. Italy's standard rate remains 22%. Across the EU, VAT rates for art sales vary between 17% and 27%, depending on the member state.

However, many EU member states offer reduced VAT rates for works of art, antiques, and collector's items. These rates are designed to support the cultural sector and enhance market competitiveness. In France, sales of artworks below €5000 are exempt from VAT, providing additional support for smaller transactions.

• France: 5.5% on direct sales by artists, and also for qualifying imports.
• Germany: 7% on art sales, intra-community acquisitions, and imports of certain artworks, effective since early 2025 (reduced from 19%). This applies to traditional artworks like paintings, original sculptures, and hand-signed prints in limited editions.
• Italy: A significantly reduced 5% rate for art sales and imports of original artistic works, effective June 2025 (down from 22% and 10% respectively).
• Netherlands: 9% on cultural goods.
• United Kingdom: 5% on qualifying art imports.

Germany's reduction to 7% is expected to strengthen its art market and enhance its international competitiveness.

Expert Tip: "These reduced rates make a big difference, especially for high-value transactions. However, they often come with specific conditions. For example, in Germany, digital artworks, photographs (unless artist-developed, limited, and signed), and serial reproductions typically remain subject to the standard 19% rate. Always verify if your artwork qualifies." — Charlotte Menager, Operations Team Lead

Not sure if your work qualifies for reduced VAT? Speak to our team.

The VAT Margin Scheme Explained: Key Changes for 2025

The VAT Margin Scheme is a crucial tool for dealers who acquire second-hand art from private individuals. Instead of paying VAT on the entire sale price, you only pay it on your profit margin.

Calculation Example:

• You acquire a painting for €10,000 (no VAT charged by a private seller).
• You sell it for €15,000.
• Your profit margin is €5,000 (€15,000 - €10,000).
• If your standard VAT rate is 20%, the VAT due on the margin is: (€5,000 / 1.2) * 20% = €833.33. This is significantly less than 20% on the full sale price (€3,000).

Eligibility and New Limitations:

This scheme applies to:

• Second-hand artworks acquired from private individuals.
• Works purchased from VAT-registered dealers who also applied the margin scheme.
• It cannot be used for new works acquired directly from living artists.

Crucially, major changes to the EU VAT Directive (effective January 1, 2025) have significantly impacted the margin scheme.`

Expert Tip: "The most critical change for art dealers is the inability to combine a reduced import VAT rate with the margin scheme on resale. Previously, you could import art at a low rate and then apply the margin scheme. Now, if you benefit from a reduced import VAT rate (like France's 5.5% or Italy's new 5%), you generally cannot use the margin scheme for the subsequent sale. Instead, you will have to charge VAT on the full selling price at the standard rate of the country of sale, or the reduced domestic rate if applicable and allowed." — Charlotte Menager, Operations Team Lead

This new rule means dealers must carefully analyze which scheme is more beneficial on a case-by-case basis. If you purchased art under the margin scheme, you also cannot reclaim input VAT on that original acquisition cost.

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International Trade: Imports & Exports of Art

VAT on Imports into the EU: When bringing art into the EU from a non-EU country, import VAT is generally applied. This is paid by the designated recipient of the goods on the import declaration, whether a business or a private individual. In the UK, VAT on imported art is paid at a rate of 5%.

• Calculation Base: Import VAT is typically calculated on the commercial value of the work plus transportation costs to the first point of entry into the EU (CIF/CIP value), plus any applicable duties or other taxes.
• Reduced Rates: Many EU countries apply reduced import VAT rates for artworks: for example, France applies 5.5%, and Italy now applies 5%. Germany applies 7%.
• Recovery: If the importer is a business registered for VAT, the import VAT paid can typically be recovered. Private individuals cannot recover import VAT as it is a final consumption tax for them.
• Customs Duties: Generally, original works of art, antiques, and collector's items are exempt from customs duties when imported into the EU, regardless of the country of origin. However, a small processing fee may be charged by the carrier. Non-traditional art forms or reproductions may incur standard duties.
• Cultural Property Licensing: For artworks exceeding 250 years in age (or other specific cultural goods), mandatory import licenses may be required within the EU, regardless of declared value. This requires advance planning.

VAT on Exports from the EU: Sales of art from an EU country to a buyer outside the EU are generally zero-rated for VAT. This means you do not charge VAT on the sale.

Expert Tip: "While zero-rated, robust documentation is paramount for exports. You must retain comprehensive proof that the work has left the EU, such as customs forms (e.g., the ECS de sortie for France), shipping documents, and proof of delivery. Without this, tax authorities may challenge the zero-rating and demand the VAT be paid. Exporters also need to comply with any cultural property regulations for exporting certain items." — Charlotte Menager, Operations Team Lead

Intra-EU Deliveries (B2B): For sales between VAT-registered businesses within different EU countries, VAT is generally "reverse-charged." This means the seller zero-rates the supply, and the buyer is responsible for accounting for VAT in their own country. This avoids VAT being charged twice.

What About Shipping Costs?

VAT also applies to transportation services, with different rules for private individuals and businesses:

For Private Individuals:

• Intra-EU Transport: If a private individual (non-VAT registered) ships art between EU countries (e.g., from Germany to France), they will typically pay the VAT rate applicable in the country where the transport starts or is deemed to take place (often the standard rate, e.g., 20%).
• Import from Non-EU: When importing a work from a non-EU country (e.g., NYC to Paris), VAT will only be payable on the portion of the transport that takes place within the EU (i.e., the French part if directly to France). There is no VAT on the international leg for private individuals.
• Export: Private individuals generally do not pay VAT on the transport of their works of art for export from the EU.

For Businesses (VAT Registered):

• All Transport: If a VAT-registered company (European or otherwise) imports or exports art, it will generally pay VAT on all transport services at the standard rate (e.g., 20% in France). However, this input VAT is usually recoverable by the business on its regular VAT return.
• Simplified Import VAT Declaration: Since January 1, 2015, businesses in France benefiting from the single local clearance procedure (PDU) can opt to declare import VAT directly on their regular turnover declaration, simplifying the process.

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Staying Compliant: Documentation and Deadlines

Comprehensive record-keeping is your first line of defense. You must retain all invoices, receipts, customs documents, insurance records, detailed artwork descriptions, and professional valuations for a minimum of six years (this can vary by country, with some requiring up to 10 years).

Filing Obligations:

• Most EU countries require mandatory electronic VAT filings on a quarterly basis.

Expert Tip: "Establish a robust accounting system that can track and categorize all transactions accurately from day one, strict deadlines are enforced, and penalties for late or incorrect submissions are often automatic."

Penalty Structure:

• Late Filing: Minimum €100 automatic penalties with escalating charges.
• Incorrect Submissions: Percentage-based penalties calculated on outstanding amounts (e.g., 5% to 100% of the unpaid tax, depending on the severity).
• Registration Failures: Can result in backdated VAT liability plus accrued interest and significant fines.

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Specialized Market Considerations

• Gallery Operations and Consignment: Clarify whether you're acting as an agent (earning a commission, on which VAT is charged) or buying the work outright as a principal (where VAT applies to the full sale price or margin). Exhibition admission charges and related services are also typically subject to VAT.
• Digital Sales Platforms: If you sell online across EU borders, be aware of the €10,000 EU-wide threshold for distance selling to private individuals. Once exceeded, you must either register for VAT in each country where you sell or use the EU's One-Stop-Shop (OSS) system to simplify reporting and payment across multiple jurisdictions.
• Private Collector Activity: If a private collector regularly sells works for profit, tax authorities may reclassify them as a business, triggering mandatory VAT registration. Factors assessed include frequency of sales, profit-seeking intent, and professional marketing activities.

What’s Next: E-Invoicing Mandates

The European landscape for invoicing is rapidly evolving with the widespread implementation of mandatory e-invoicing systems.

Electronic Invoicing Defined: E-invoicing refers to digital invoice formats that enable real-time (or near real-time) transaction reporting directly to tax authorities through certified platforms. This is more than just sending a PDF; it involves structured data exchange for automated verification and reporting.

Implementation Timeline:

• France: Mandatory B2B e-invoicing begins in 2026.
• Germany: Commercial transactions exceeding €1,000 will require e-invoicing from 2028.
• Many other EU jurisdictions are phasing in similar requirements through 2028.

Expert Tip: "Early preparation is crucial for e-invoicing. This means investing in certified software systems with direct tax authority integration, adapting your accounting infrastructure, and training staff. Real-time VAT verification will become the norm, so proactive readiness is key to avoiding compliance issues."

Final Thoughts and Expert Recommendation

VAT compliance within the contemporary art market demands a sophisticated understanding of multi-jurisdictional requirements, specialized schemes, and evolving digital obligations. While regulatory complexity presents challenges, strategic implementation of proper systems and procedures enables full compliance while optimizing legitimate tax efficiencies.

The art market's international character necessitates professional guidance and systematic approaches to VAT management. As digital transformation accelerates through e-invoicing mandates and enhanced reporting requirements, early preparation and expert consultation become essential components of sustainable art business operations. Understanding these rules isn't just about avoiding penalties; it's about protecting your margins and making your art more accessible to buyers globally.

For more details on specific tax implications, especially regarding the flat-rate tax on precious metals, jewelry, works of art, collectors' items or antiques for individuals residing in France, you can consult our previous article on May 5, 2020.

Read our previous article on VAT rules.

Frequently Asked Questions

1. Do I need to charge VAT when I sell art internationally?

If the buyer is outside the EU, the sale may be zero-rated, but documentation is essential to prove the export.

2. What's the VAT rate for importing art into France in 2025?

As of July 2025, France applies a reduced 5.5% VAT on art imports.

3. Can I use the margin scheme for newly created artwork?

No. The margin scheme only applies to second-hand works acquired from private sellers or other margin-using dealers.

4. What’s the benefit of voluntarily registering for VAT?

You can reclaim VAT on business costs, like studio rent, materials, or insurance, and build legitimacy with buyers and institutions.

5. How does VAT affect art shipping costs?

VAT applies to the EU portion of transport for private individuals and to the full cost for VAT-registered businesses, though it may be recoverable.