As of July 1, 2025, Italy has implemented a reduced 5% VAT rate on the sale and importation of artworks, antiques, and collectors' items. The measure, published in the Official Gazette on June 30, 2025, is part of a decree-law that must be converted into law by Parliament within 60 days of its entry into force to remain effective.
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.
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, where countries like France and the UK have long benefited from more favourable tax regimes. It may also stimulate the circulation of artworks within the EU and beyond, aligning Italy more closely with international best practices.
While the measure is still subject to parliamentary conversion, its introduction marks a potentially transformative moment for the Italian art ecosystem—one that could foster growth, transparency, and renewed international engagement.
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