France to raise VAT rate on art from 7% to 10% Jan 2014
French VAT on the sale of art is to increase from 7% to 10% on 1 January 2014.
French VAT rate increases
This rise comes as French VAT rates are simplified to match EU VAT rates – including a higher standard rate and one single lower rate. There are currently three lower French VAT rates: 5%; 7%; and 10%. There is also a super reduced rate of 2%. The standard VAT rate is 19.6%, although the French VAT rate is scheduled to rise to 20% in 2014. In general, EU VAT rates are on the rise, with the average VAT rate increasing from 19% to over 21% in the last five years.
The increase will be a blow to the French art market. It’s biggest competitor, London, only charges 5% UK VAT reduced rate. Many auction houses will protest this rise as pushing international sellers out of their market. A recent report by the French trade association warned this rise will hit the key Foire internationale d’Art Contemporain in particular.
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