In a landmark decision, Italy has announced a dramatic reduction in its VAT (Value Added Tax) on art sales, from a staggering 22%, the highest in Europe, to just 5%. The new rate, set to take effect later this week, will make Italy’s VAT on art transactions the lowest in the European Union, outpacing both France (5.5%) and Germany (7%). This decision, approved in a cabinet meeting on June 20, is expected to have a profound impact on Italy’s art ecosystem, providing a significant boost to galleries, artists, and auction houses across the country.
Today Artsper delves into the details of this groundbreaking reform and its potential to reshape the country’s art landscape, providing much-needed relief to galleries, artists, and the wider art market.
Alessandra Bisi, Absolute blu 2, 2021, available on Artsper
A Major Victory for Italy’s Art Market
Sirio Ortolani, president of ANGAMC and vice president of the Apollo Group, expressed that the tax reform represented a significant turning point for Italy’s art market. He noted that, with this change, Italy now had the potential to become a major international hub, attracting galleries from across Europe and major art fairs. Ortolani's comments reflect the growing optimism in the Italian art scene, which has faced challenges due to its high VAT rate, often deterring both collectors and dealers from engaging in business within the country.
This bold reversal marks a significant shift from the previous stance of Italian Ministry of Culture, which had initially been resistant to reducing the tax. In April, a letter signed by 500 prominent figures in the art world, including renowned artists Maurizio Cattelan and Michelangelo Pistoletto, warned that the 22% VAT rate was pushing Italy towards becoming a “cultural desert.” The tax cut announcement comes as a welcome relief to the cultural sector, which had voiced concerns that Italy was losing its competitive edge in the global art market.
Antonino Puliafico, Abbaglio Marino, 2022, available on Artsper
A Boost for Italy’s Economic and Cultural Landscape
According to a study by Nomisma and Intesa Sanpaolo, the new VAT rate could help galleries, antique dealers, and auction houses in Italy generate €1.5 billion over the next three years. Furthermore, the report estimates that Italy’s broader economy could benefit by an additional €4.2 billion as a result. The lower VAT rate is expected to stimulate both domestic and international demand, making Italy an even more attractive destination for art collectors, galleries, and auction houses.
tax advisor and art collector, noted that the VAT cut could also extend to Italy’s import tax on art, positioning the country as the most competitive art market in Europe. However, Mattei added that industry professionals are still awaiting the official text of the decree to confirm how the VAT reduction will be implemented.
Mimmo Rotella, Campo N.10, 1998, available on Artsper
Impact on Galleries and Artists
The reduced VAT rate will have a particularly significant impact on Italian galleries and artists, who have long been burdened by the high tax rate. Italian galleries, now able to operate with a more competitive tax structure, are expected to see a boost in both domestic and international sales. Artists, too, will benefit from the increased market activity, with reduced taxes translating into more opportunities for exhibitions, sales, and international collaborations.
Andrea Festa, a contemporary art gallerist in Rome, expressed his relief over the change, noting that Italy’s high VAT had previously put galleries at a competitive disadvantage. “In a globalized art market, it’s increasingly important for artists to collaborate with galleries in different countries. The disparities in VAT rates were impossible to ignore,” Festa said. “This reform is not just helpful, but essential for the future of Italy’s art market.”
With Italy now offering a more attractive tax environment, galleries and artists in the country will be better positioned to compete globally, potentially increasing their visibility in international markets and bringing a wealth of new collectors to Italy.
Italy’s Competitive Edge in the Global Art Market
The reduction in VAT will undoubtedly have far-reaching effects, helping Italy regain its competitive edge in the European and global art markets. In 2024, Italy’s art sales totaled an estimated $381 million to $425 million, a figure that pales in comparison to the $10.4 billion in sales generated by the UK and $4.2 billion from France. With the new VAT rate, Italy stands to become a more attractive destination for both international collectors and art market players, eager to take advantage of the country’s favorable tax policies.
Dr. Love, Happy sea, 2025, available on Artsper
Looking Ahead: A New Era for Italian Art
The Italian government’s decision to cut VAT on art sales from 22% to 5% is set to have a transformative effect on the country’s art market. With the potential to boost gallery sales, increase international trade, and strengthen Italy’s global cultural standing, this policy reform marks a new chapter for Italy’s art sector.
As the art world eagerly anticipates the implementation of these reforms, it is clear that Italy is poised to reclaim its position as a global leader in the art market, offering a competitive and dynamic environment for collectors, dealers, galleries, and artists alike.