The problem of galleries and the Sales Tax

Art galleries have always protested against the extension of the resale right to the private trade in works of art. They argue that: They have agreed to participate in the financing of the social security system for artists for what is commonly called the “employer’s share”. They promote the works of artists, which results in the constitution of heavy stocks, which should exempt them from such a burden. In support of their position, the galleries also point out that the German system, which does include a resale right, is proving to be more favorable.

The regime applicable in Germany to galleries is as follows: in principle, they have 5% resale right and 7% social security contribution. But they concluded an agreement with a company, which represents the artists. In this context, the German galleries pay this company an amount equal to 0.8 of their turnover. This payment takes the place of both the resale right and the social security contribution. You need the sales tax calculator zip code there.

Public sales and the problem of international competitiveness

From the perspective of this report, it should only be noted that it is not seen in London or New York.

• The result is a clear trend towards the concentration of contemporary art sales towards these two places, which, at least for the second, accentuates the attraction of an already dominant American market due to the importance of its artists and the number and wealth of its collectors.
• If you do not invoice (because you are not obliged to do so, which is rather rare in B2C situations), the collection system also applies: Sales tax becomes payable on the amount collected, at the time of payment. receipt of payment.
• Let us finally examine the B2G situation: the customer is a body governed by public law. Although you are still required to issue an invoice, Sales tax is only payable upon receipt of payment in whole or in part, up to the amount received. However, this rule has some exceptions (such as the delivery of new buildings).

The option is global and necessarily covers a period of two years, including the one during which it is declared (for example, an option declared on June 10, 2019 will take effect from June 1, 2019 until December 31, 2020).

Conclusion

It is renewable by tacit agreement for the same period, unless terminated at the latest at the end of each period. However, when professionals have obtained a refund of the tax credit during or at the end of an option period, they cannot, at the end of this period, denounce the option which is then fully renewed. right for a further period of two years.