The Italian government has approved a landmark reduction in VAT on artworks, antiques, and collectibles – from 22% to 5% on art transactions, making it amongst the most competitive rate in Europe. VAT on art imports from non-EU countries has also been lowered from 10% to 5%.
The measure, announced on June 20 by Culture Minister Alessandro Giuli and included in the omnibus decree (Art. 8), applies to the entirety of art transactions, including imports and direct sales by artists. It will enter into force 60 days after publication in the Gazzetta Ufficiale.
This reform positions Italy as the EU country with the lowest VAT rate on art transactions, ahead of France (5.5%) and Germany (7%). According to the Ministry of Culture, the goal is to make Italy more competitive and attractive for collectors, galleries, and international investors, particularly in the post-Brexit context.
Art sector representatives have welcomed the reform, describing it as a 'historic achievement' and predicting a potential increase in turnover of up to €1.5 billion over the next three years.
The VAT cut complements Italy's favourable flat-tax regime for new residents, under which individuals relocating to Italy can opt to pay a fixed annual tax of €200,000 on foreign income. Combined, these incentives are drawing high-net-worth individuals, art collectors, and galleries – especially in cities like Milan, Florence, Rome, and Venice – positioning Italy as an increasingly competitive hub in the global art market.
While this reform represents a major step forward for Italy's art market, it is also important to remain mindful of relevant EU regulations. In particular, the upcoming EU Regulation 2019/880 on the import of cultural goods (effective June 28) and existing cultural heritage restrictions continue to play a key role in shaping cross-border transactions. These frameworks should be considered proactively to ensure full compliance and to make the most of Italy's new competitive edge.
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