Fine Art - Direct and indirect taxation aspects
A masterwork of complexity
Art can be viewed in a multitude of ways– a store of wealth, a masterpiece to cherish, a family heirloom, a part of a trust or estate, or even a gift to a cultural institution. Whatever owning an artwork means to a private individual, business or public entity, tax concerns are always relevant.
Building on the strength of Deloitte’s dedicated Art & Finance initiative, our Luxembourg and global tax experts have turned their attention to creating tailor-made tax structuring solutions for art holdings. An art collection frequently represents a substantial part of a family’s wealth and has become a key aspect of its financial and succession planning.
Art represents an asset that is becoming increasingly part of a family’s identity, as well as an investment opportunity that offers returns and diversification. Recent developments have shown that there is a significant opportunity to integrate art into wealth management as a way of preserving and growing a family’s wealth. With the popularity of art as an asset class continuing to grow, Deloitte Luxembourg has for the past several years been providing a wide range of Art & Finance services to its clients: private and corporate collectors, cultural and art institutions, foundations, banks, asset management companies, family offices, etc.
In particular, Deloitte Luxembourg, supported by the Deloitte network, draws on the expertise of a number of tax professionals to create solutions to the art taxation issues our clients face. Deloitte is a global network that allow us to serve our clients worldwide. Thanks to that network we have developed an art tax matrix that details the different tax exposures in various countries in order to provide you with a high-level snapshot on tax issues related to art for private clients.
In addition, we can provide tailor-made tax structuring solutions for investments in artworks, which may encompass transferring a collection to a cultural institution, setting up an investment fund, etc.
Art at work: a tailor-made approach
And the first rude sketch that the world had seen was joy to his mighty heart, till the Devil whispered behind the leaves 'It's pretty, but is it Art?'
Is it art?
This question makes a lot of sense for indirect tax purposes as the customs and VAT rules relating to art works are very peculiar.
Customs and/or VAT warehouses, freeports, temporary admission/importation regimes, specific rules for artists, galleries, collectors and intermediaries, different rules - including different VAT rates and possibly reduced rates - different in each member state of the European Union.
Finding out the most efficient indirect tax path, taking into account business and logistic constraints, may be thorny.
Any ‘art business’ stakeholder must have these considerations in mind in order to avoid unpleasant surprises and possible deal breakers.
Our offer - art at work: a tailor-made approach
Customs and VAT rules relating to art works are far too complex for a ‘one size fits all’ structure.
Depending, among others, on the nature of the seller, the purchaser, the intermediaries, the art work itself, the physical flow of the art work and the place where the art work is sent, the best approach from an indirect tax viewpoint may be totally different.
- We offer the expertise of a network of European indirect tax specialists dedicated to this issue.
- You will benefit from excellent advice to set-up your art works operations in a VAT-effective way.
- You will avoid unpleasant surprises, last minute deal breakers and other indirect tax pitfalls.
Deloitte Art & Finance International conferences
The Deloitte Art & Finance conference brings together international experts and local players to discuss issues and share their visions .