The import tax can be understood as soon as it regulates the imports of goods that a country (or a set of countries governed by a common market) uses, from other countries, and that weigh on its external balance. When exports exceed imports, the country becomes richer. When exports exceed imports, the country becomes poorer.
For works of art, the system operates in exactly the opposite way. As Martine Robert writes in an article in Les Echos entitled "How France is preparing to scuttle its art market": "Art is not a commonplace consumer good: a state gets rich from its imports and the production of its artists. Conversely it is impoverished by its exports".
However, it reveals today that the import tax on works of art from outside the EU will rise from 5.5% to 20% from January 1, 2025, according to a directive decided "unanimously" by Europe last April. Unanimously, therefore, with the agreement of France which, since the departure of the United Kingdom from the EU, is the only country that still has a strong art market, and whose share was even growing for multiple reasons - including Brexit - as the article in Les Echos explains very clearly, and as we wrote again recently (see the news item of 6/12/22), without having knowledge of this directive.
However, it is important to understand what this measure would mean for individuals, dealers and auctions.
If a collector buys outside the EU for his collection in France, he must pay the import tax. This means that he was already paying 5.5% in addition to local taxes, and that tomorrow he will pay 20%. What is the logic of such a decision, while at the same time certain measures such as classification as a national treasure are taken to keep works of art in France?
If a dealer buys a work of art outside the EU and brings it to France to sell it, he will have to pay the 20% tax (instead of 5.5% today) which he will only be able to recover if he sells it to a foreigner outside the EU. This means an increase of 14.5% in the purchase price for a French buyer or a reduction in the dealer’s margin.
If an object from outside the EU is sold at auction in France (which contributes to the growth of auctions in France and therefore to the increase in taxes induced by these sales), either it is acquired by a non-EU buyer who will not pay the import tax, or it is acquired by a French buyer or a buyer from a country belonging to the EU, and the latter will pay in addition to the buyer’s fee the 20% import tax (instead of 5.5% today).
While Americans, for example, often have much greater financial means than the French, the purchase of an important work of art that already costs 5.5% more when it is put up for sale in the United States will now be 20% more expensive for a French person... In addition to the disastrous effect on the art market, all players included, the purchase of works by countries outside the EU is thus encouraged at the expense of French collectors.
Museums that buy directly from outside the EU are exempt from this tax, but if they acquire a work from a dealer, the latter will be obliged to pay it and thus either see his margin greatly reduced or increase his price by 14.5%, which will further reduce the capacity of French museums to enrich themselves.
And we are not talking here about the contemporary art market: by drastically limiting the purchase of works from outside the EU, we will prevent the formation in France of large collections of international art. Museums that are often enriched by works offered or bequeathed by collectors will thus miss out on many works by American, African, Asian, or simply English, Swiss or Norwegian artists...
Once again, the Ministry of Culture - at that time Roselyne Bachelot - and the French government have allowed a disastrous and suicidal measure for this country to pass, or worse: they have participated in it. A measure which, if applied, will have the effect of seriously hindering the French art market, the enrichment of its heritage and its museums, and will also make its economy lose a lot of money. Directly by the recession that it will cause in this activity which brews, as reminds Les Echos not less than 65,1 billion dollars, of which at least 4,5 for France, and which represents alone for this country 50 % of the turnover of the EU [1], which is logical since he had said that there is no French culture.
It is absolutely necessary, if there is still time, to come back on this delirious directive decided by small incompetent and uneducated bureaucrats: all the responsible politicians must seize this affair and prevent, in one way or another, its application. The French art market was booming, which would have benefited the French heritage. Europe, with the complicity of the French government, has just dealt it a new disastrous blow.