Italy has implemented a reduced 5% VAT rate on the sale and importation of artworks, antiques, and collectors' items. The measure, published at the end of June 2025 by a Decree Law, has been confirmed in legislation from 8 August 2025.
Previously, sales made directly by artists or their heirs and imports were subject to a 10% VAT rate, while transactions carried out by galleries and commercial operators were taxed at the standard 22% rate. Under the new regime, the 5% rate now applies uniformly to sales by artists, their heirs, galleries, and art dealers, as well as to imports.
This reform positions Italy with the lowest VAT rate for art transactions in the EU, 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, with a potential overall impact on the Italian economy of up to €4.2 billion.
However, the reduced rate does not apply when the so-called 'margin scheme' is used. This scheme, which taxes only the profit margin on resale, remains subject to the standard 22% VAT rate. It can be applied only under specific conditions—such as when works are acquired from private individuals or from taxable persons without VAT deduction, or when imported or purchased with VAT deduction under the previous regime.
Each transaction must therefore be carefully assessed to determine the applicable VAT regime and its relative advantages, taking into account the nature of the transaction and the origin of the artwork.
From an operational standpoint, the 5% rate applies to all sales and import transactions carried out from July 1, 2025. For sales, the relevant date is when the goods are delivered or ownership is transferred (unless payment or invoicing occurred earlier). For imports, the applicable date is when customs formalities are completed.
Who stands to benefit?
This reform is particularly significant for Italian art galleries, which have long struggled with the competitive disadvantage posed by Italy's previously high VAT rates. By reducing the tax burden, the new rate may:
- Encourage greater participation in the formal market by operators who were previously deterred by high compliance costs.
- Facilitate cross-border transactions, making Italy a more attractive hub for international collectors and dealers.
- Support emerging artists and their heirs, who now benefit from a more favourable and uniform tax treatment.
- Promote transparency, as lower VAT rates may reduce the incentive to operate in the informal or grey market.
Broader implications
Beyond immediate financial relief, the reform could help reposition Italy within the European art market and may also stimulate the circulation of artworks within the EU and beyond, aligning Italy more closely with international best practice, improving transparency and generating a broader economic multiplier effect across the international art supply chain.
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