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Monday, June 17, 2024

VAT rate 19 % back to 7 % for Galleries and Art Dealers

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On 5. June 2024 the German government announced that the VAT rate for art galleries and dealers will be reduced from to 7 %. This change applies from January 2025.

Image above: Courtesy Bundesverband Deutscher Galerien und Kunsthändler

For the past ten years German galleries have been fighting to reduce the VAT rate for Galleries and Art dealers, and it has finally been a success. In 2014 the VAT of 7 %  has been raised to 19 % for Galleries and art dealers, but for artists and direct sales it stayed at 7 %.

Finally – on 5th of June 2024, the German government has announced that the VAT will be reduced back to 7 %, which is amazing news for all the Galleries and Art Dealers that have been going through a rough time the past few years. This taxation law will be implemented from January 2025.

The VAT of 19 % was implemented in 2014 due to art being excluded from a list of goods and services eligible for reduced rates in a European Union directive. This unequal treatment lead to a gap between artists and their mediators. It made surviving as a small to medium sized gallery very economically challenging and many had to end their business since 2014. Since then the sales have stagnated and there were also barely any young artists on the German art market.

19 % VAT also puts the German art market in a disadvantage against other international competitors, like France and England with 5,5 %, Switzerland with 7,7 % and New York with 8,85 %. This change will not only make Germany a strong competitor again, but is also important for Germany’s cultural contribution overall.

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