Abstract
Several countries apply tax incentives to promote the sale of certain works of art, such as works of contemporary artists and works of national importance. Examples include deductions for taxpayers who buy contemporary art , sometimes on the condition that the art be made accessible to the public. Although these incentives are not specifically designed to incentivize art dealers, the incentives can have that effect by reducing net or gross prices. If the price of art is reduced as a result of tax incentives, art dealers have a competitive advantage. Other examples include deductions that reduce the net price of works of significant cultural heritage . Tax incentives can also directly influence the gross price. Examples of such incentives include reduced VAT rates and customs duties, which are used in the European Union. However, the definition of “art” is problematic in this respect. Even bigger incentives are provided in so-called free ports , which have no customs duties or transfer taxes on works of art. However, these free ports may also provide opportunities for money laundering , tax evasion , and the fencing of stolen goods.
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Notes
- 1.
Section 1102(1)(e) ITR.
- 2.
Loi n° 2003-709 du 1er août 2003 relative au mécénat, aux associations et aux foundations.
- 3.
Section 238 bis AB CGI.
- 4.
Section 238 bis-0 A CGI.
- 5.
Section 238 bis-0 AB CGI.
- 6.
Article 97 VAT Directive.
- 7.
Article 99 VAT Directive.
- 8.
Article 103 VAT Directive.
- 9.
Chapter 4 (article 311-343) VAT Directive.
- 10.
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff. An update is published regularly and can be accessed at http://ec.europa.eu/taxation_customs/customs/customs_duties/tariff_aspects/combined_nomenclature/index_en.htm. Accessed 14 November 2015.
- 11.
Online version: http://www.wcoomd.org/en/topics/nomenclature/instrument-and-tools/hs-online.aspx. Accessed 14 November 2015.
- 12.
ECJ 15 May 1985, Case 155/84, Reinhard Onnasch v Hauptzollamt Berlin - Packhof.
- 13.
ECJ 8 November 1990, Case C-231/89, Krystyna Gmurzynska-Bscher, Galerie Gmurzynska v. Oberfinanzdirektion Köln.
- 14.
ECJ 18 September 1990, Case C-228/89, Farfalla Flemming und Partner v Hauptzollamt MünchenWest.
- 15.
ECJ 10 October 1985, Case 252/84, Collector Guns GmbH & Co. KG v Hauptzollamt Koblenz, consideration 12.
- 16.
The Physical Impossibility of Death in the Mind of Someone Living, Damien Hirst 1991.
- 17.
My Bed, Tracey Emin 1998.
- 18.
Commission Regulation (EU) No 731/2010 of 11 August 2010.
- 19.
The heading of Section XVI is “Machinery and mechanical appliances; electrical equipment; parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles”.
- 20.
Haunch of Venison Partners Limited v HM Revenue and Customs, C 00266, 11 December 2008.
- 21.
Brancusi vs. United States, US Customs Court, 26 November 1928.
- 22.
In Switzerland , the German word for these free ports is Zollfreilager, and the French word is dépôts francs. Section 175 ZV.
- 23.
http://www.cfass.com/singapore-freeport/en/ Accessed 12 November 2015.
- 24.
Article 576 CCIP.
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Hemels, S. (2017). Tax Incentives for the Art Market. In: Hemels, S., Goto, K. (eds) Tax Incentives for the Creative Industries. Creative Economy. Springer, Singapore. https://doi.org/10.1007/978-981-287-832-8_9
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