PARIS, Sept. 25,
2023 /PRNewswire/ -- France's art market professionals will be
extremely relieved by this news. The French government has decided
to maintain the VAT rate at 5.5% for initial sales and imports of
artworks from countries outside the European Union, proof that the
two French Ministers, (Rima Abdul
Malak for culture and Bruno Le
Maire for the economy) succeeded in making their case
against strong headwinds from Brussels.
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If they had failed, there was a high risk that VAT would be
raised to 20% before 1 January 2025,
which would undoubtedly have broken the dynamics of the French art
market, now the fourth largest national art market in the world
according to Artprice.com by Artmarket.
Over recent years France has
been accumulating a number of very positive signals for the
re-emergence of its art market. These include the presence of large
private foundations such as the Fondation Louis Vuitton and the
Pinault Collection, the replacement of the FIAC with Paris+
(organized by Art Basel), the
arrival and/or expansion of major international galleries such as
the Gagosian, Zwirner, Skarstedt, Max
Hetzler, Thaddaeus Ropac, Continua, Marian Goodman, and Bonhams' recent acquisition
of the French auction house Cornette de
Saint Cyr, not to mention the rise of the two major global
auction houses, Christie's and Sotheby's, both owned by French
business tycoons (François Pinault and Patrick Drahi respectively),
and, the successful transformation of Drouot, and Arcurial
(Dassault family), France's
leading auction house in terms of turnover which now ranks 14th
among the world's top 20 auction houses.
Since Brexit, the French art market has been the main
beneficiary being the main gateway to the European Union.
A VAT rate hike to 20% would have a negative impact not just on
artists, antique dealers, art dealers, and auction houses, but also
on the entire art market ecosystem which includes tens of thousands
of people employed in related fields ranging from frame-building to
journalism, from restoration to transport, from logistics to
security and from tourism to insurance.
In March 2023 the Parisian gallery
owner Kamel Mennour told the Le Monde newspaper (interview
by Harry Bellet) "If the increase
makes it difficult for me to sell their works, I will obviously be
less inclined to sign new artists". Now that the VAT has been
maintained at 5.5%, Kamel Mennour can breathe a sigh of
relief...
Artprice.com by Artmarket congratulates the government's
decision.
VAT at 20% would have harmed the art market in France as a whole, and, as a result, would
have damaged the confidence and dynamism of Artprice.com by
Artmarket's French clientele. Incidentally – as the World Leader in
Art Market Information for more than 25 years – Artprice
notes that its French clients, who represented less than 5% of
their total clientele a few years ago, now represent more than 10%
(see Artmarket.com's universal reference document registered with
the AMF, France's Financial
Markets Authority), showing that French collector participation has
doubled.
The reduced VAT rate of 5.5% will therefore continue to apply as
of 2025 to initial sales as well as to imports of artworks from
outside the EU. The rate will apply to the total price and not just
to the margin, which will penalize low-margin sales very
slightly.
"A VAT rate at 20% would, for example, prevents the return to
our country of Impressionist paintings or even masterpieces of
Modern art by the likes of Picasso, Matisse and Manet, which are no
longer in France although they
were created in France and are
adored by French collectors. Art is not a common consumer good: a
State is enriched by its imports as well as the production of its
'home-grown' artists. Inversely, the departure en masse of its
national treasures has an impoverishing impact on the State that
loses them." This idea was expressed with courage by journalist
Martine Robert who became the
'whistleblower' for this cause for the French economics newspaper
Les Échos in February
2023.
thierry Ehrmann – founder of Artprice and CEO of Artmarket.com
and himself a sculptor (see his biography in Who's Who In
France) – made the
following observation: "This decision by the government will
ensure that the dynamism of the French Art Market is not disrupted.
We can only rejoice at this courageous decision by our Ministers
Rima Abdul Malak and Bruno Le Maire. Artprice.com by
Artmarket has worked for more than 25 years with all the players in
the French art market, and it knows how much the VAT rate can
impact the good performance of the art market. As a sculptor, I
have been passionately following artistic creation in France for 40 years, and it is once again
resonating around the world. This move will give substantial
reassurance to French artists."
Faced with an increasingly globalized art market, France remains a strong and competitive
market.
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France's place in the global
and European art market
In the first half of 2023, French auction houses sold 54,000
fine art lots, generating a total turnover of $384.3 million. Artprice.com's econometrics
department has calculated that France therefore accounts for 5.9% of the
overall value of global art auction sales, (giving it 4th place in
the world) and 50% of the European art market. And it is creeping
ever closer to the Top 3 podium.
Several other European Union countries also play significant
roles in the global art market, albeit on smaller scales:
Germany (2.8% of global art
auction turnover), Italy (1.5 %),
Switzerland (1.3%), Austria (0.8%), Poland (0.6%), Belgium (0.6%). Much less centralized than
France, the German market is the
strongest neighboring country, and Sotheby's has recently launched
new sales sessions in Cologne.
Read Artprice by Artmarket reports on the art market:
https://www.artprice.com/artprice-reports/the-art-market-in-2022
Competition with the United
Kingdom
Despite Brexit, the United
Kingdom still accounts for 17% of global art auction
turnover with 5% VAT. The competition between London and Paris is particularly palpable every year in
October.
In a few weeks, Frieze London and Paris+ by Art Basel will take place in short succession.
For the first time ever, the latter will be hunting on an equal
footing with the Frieze, thanks to the power of Art Basel. In all, October is an intense period
with the most prestigious galleries deciding whether or not to make
the trip across the Channel. It is also a key time with auction
houses hosting major sales and several organizations choosing to
make major announcements to the world press. The Marcel Duchamp
prize, for example, is awarded every October by the ADIAF (of which
Artprice.com by Artmarket is a patron) to an artist from the French
art scene at the Pompidou Center in Paris.
According to Artprice.com's econometrics department, in 1960,
France's share of the global art
market was 62%. The old stock market adage "a price once attained
always comes back sooner or later," also works in economics...
More than 23 years ago, when Artprice definitively became the
World Leader in Art Market Information following the spectacular
and unexpected acquisition of the American leader Sound View Press
NY, there was a widely held belief in financial and economic
circles that Artprice's head office would inevitably migrate to its
New York offices. The decision to
stay in France was indeed a daring
one. Today, France can rest
assured that the World Leader in Art Market Information,
Artprice.com by Artmarket, will remain in France.
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