Chamber, from 19 May the bill on 5% VAT for the supply of art goods

For the Italian art market, the timescale for resolving the fiscal imbalance on trade with France and Germany is becoming clearer: on 19 May in the Chamber of Montecitorio there will be a debate on the general lines of the proposed law Amorese-Congedo (Fdi) 'Amendments to table A annexed to Presidential Decree No. 633 of 26 October 1972, concerning the reduction of the rate of value added tax on art, antiques or collectors' items'. This was decided by the Conference of Group Leaders in Montecitorio. The pdl is assigned in referent seat to the Finance Commission (in consultative seat to the Constitutional Affairs, Budget, Culture, Productive Activities and EU Policies Commissions), which on 14 January delivered the introductory report, rapporteur Congedo. "Reducing VAT on the sale of art goods is necessary and fundamental for relaunching the sector," Amorese stressed on 27 March at the presentation of the Nomisma report on the art market in Italy.

The Minister of Culture, Alessandro Giuli, also intervened on the subject yesterday, replying to a question during question time at Montecitorio, confirming 'the need to intervene to reduce the VAT rate on art, antiques or collectors' items, and I confirm that the Ministry of the Economy and Finance supports the initiative. We are in the process of defining the necessary coverage'. The aim of the bill is to support the Italian art sector and the operators of the entire national supply chain, 'who find themselves facing growing international competition as well as operating within an uncertain and evolving legislative framework', by intervening on the rate of VAT on art objects, 'in the knowledge that a tax reduction would lead to the relaunch of an extremely important sector, while attracting artists, collectors and investors from all over the world'.

Composed of three articles, it is aimed at introducing a reduction - from 10% to 5% - of the VAT rate applicable to works of art, antiques and collectibles. In detail, Article 1 defines the principles and purposes of the bill, which aims to provide for the reduction of the VAT rate applicable to art, antiques and collectors' items in order to economically revitalise the art and antiques sector. This reduction is envisaged pending the implementation of Directive (EU) 2022/542 on VAT, as well as pending the implementation of the specific provisions contained in the Proxy Law for tax reform, on the subject of VAT applicable to imports of works of art (Article 7, paragraph 1, letter e) of Law no. 111 of 9 August 2023) and, lastly, in compliance with the constraints deriving from the Union system (pursuant to Article 117, paragraph 1, of the Constitution).
Directive (EU) 2022/542 provides for the possibility for all Member States to apply, on an exceptional basis, reduced VAT rates to eligible goods and services, up to a maximum of two reduced rates of not less than 5 per cent, one reduced rate of not less than 5 per cent, and an exemption with the right to deduct input VAT. In particular, among the main new features of the Directive is the updating of the list of goods and services to which Member States may apply reduced rates of VAT or exemptions with a right to deduct VAT, contained in Annex III to Directive 2006/112/EC. The Annex introduces a reference to the supply of works of art, collectors' items or antiques as an additional circumstance to which the reduced VAT rate may be applied.
In addition, Article 7, paragraph 1, letter e) of the Delegated Law for Fiscal Reform (No. 111 of 2023) provides that the Government, in the implementation of the delegated power with reference to value added tax, shall proceed to reduce the VAT rate on the importation of works of art, transposing the above mentioned Directive (EU) 2022/542 and extending the reduced rate also to the supply of works of art, antiques or collectors' items, as already done by France and Germany

Article 2 then sets forth provisions aimed at reducing the VAT rate applicable to imported works of art, antiques and collectibles, as well as to works of art sold by authors and their heirs or legatees, from 10 to 5 per cent. To this end, the Decree of the President of the Republic No. 633 of 1972 is amended and, in particular, Table A annexed to the aforementioned decree, which identifies the list of goods and services subject to reduced VAT rates. Point (a) of the sole paragraph of Article 1 includes in the list of goods and services subject to the 5 per cent rate the following goods: imported works of art, antiques and collectors' items; works of art supplied by authors and their heirs or legatees. For the purposes of coordination, the following subparagraph (b) expunges the aforesaid goods from the list of goods and services subject to the 10 per cent rate. For the identification of the supplies to which the 5 per cent VAT rate is applicable, express reference is made to the list of works of art set forth in subparagraph (a) of the table annexed to Decree-Law No. 41 of 23 February 1995. Article 3 provides for the financial coverage of the charges deriving from the measure under review, estimated at €90 million as of 2024.