The Consortium of Contemporary Art Galleries has requested the Government and the opposition to transpose European Directive 2022/542 to apply a reduced VAT to the sector. The request comes after the European Commission filed a complaint against Spain before the Court of Justice of the EU, exposing gallery owners to potential double taxation compared to the 26 countries that have already adopted the regulation.
Digital transposition and taxation for the art market 🎨
Directive 2022/542 establishes the option to apply reduced VAT rates to supplies of works of art, which in practice simplifies tax management for galleries and online sales platforms. Without transposition, cross-border digital transactions are subject to disparate criteria, generating additional administrative burdens. Implementing a harmonized system would allow Spanish galleries to compete on equal terms, reducing the cost of regulatory compliance in the digital art ecosystem.
Europe demands answers and the Treasury plays dumb 😅
While Brussels takes Spain to court for not applying the reduced VAT, the Ministry of Finance seems to be looking for a blank canvas to paint the solution. Gallery owners, amid nervous laughter, wonder if the next exhibition will be of contemporary art or tax jurisprudence. At least, if double taxation arrives, they can always deduct the frame.