Belgian Dealers Face 21% Value Added Tax On Works Of Art

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Belgium’s vibrant art scene faces a significant threat as the Ministry of Finance proposes a drastic increase in VAT rates for works of art, potentially jeopardising the sustainability of galleries, fairs, and auction houses within the country. While France and Luxembourg have opted for reduced VAT rates of 5.5% and 7%, respectively, Belgium proposes to impose a staggering 21% VAT on the entire artwork price, creating unfair competition with neighbouring countries and undermining the market for talented Belgian artists.

The proposed VAT hike comes from the European Union’s directive 2022/542, which mandates the partial abolition of the ‘special’ profit margin scheme for the art market sector, effective 1 January 2025. This directive threatens to disrupt the longstanding system wherein dealers could apply VAT only on the difference between the purchase and resale price of artworks. With Belgium considering a blanket 21% VAT rate, concerns arise regarding the adverse economic impact on the art market and its stakeholders.

The repercussions of such a decision extend beyond financial implications, striking at the heart of Belgium’s cultural identity and international influence. Artists, museum directors, dealers, and auction houses unite in opposition to the proposed VAT increase, highlighting the interconnectedness between artists, artworks, and collectors and the vital role they play in shaping the social and economic fabric of the nation.
The potential consequences of Belgium’s tax legislation extend beyond immediate financial losses, threatening the future viability of cultural institutions such as Art Brussels and the internationally acclaimed BRAFA. Moreover, Belgium must catch up in the fiercely competitive global art market, diminishing its attractiveness as a cultural hub and undermining its position as the 11th largest worldwide art market.

It is imperative that Belgium reconsiders its approach and adopts measures to maintain its competitiveness and preserve its rich cultural heritage. Returning to a ‘classic’ system of sales subject to the reduced VAT rate of 6% would not only safeguard the art market’s future but also uphold Belgium’s status as a beacon of artistic creativity and innovation in Europe. Failure to do so risks relegating Belgium to the sidelines of the creative landscape, depriving it of the cultural richness and economic prosperity that art brings.

Belgium’s galleries are known for their eclectic mix of established and emerging artists, showcasing a diverse array of styles and mediums. From avant-garde installations to classical masterpieces, these galleries are dynamic hubs for artistic exploration and discovery. With a keen eye for talent and a commitment to nurturing creativity, Belgian galleries play a crucial role in shaping the trajectory of contemporary art both locally and internationally.

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