It’s hard to make tax sexy, but Italy is doing its best.
On Monday, the Italian government announced it would cut the country’s VAT from 22% (highest in the EU) to just 5%. The cuts that will now take effect later this week will now be the lowest in the EU. Germany and France are the closest to 7% and 5.5% of barrels for art sales, respectively.
The move was approved at a cabinet meeting on Friday. Financial Timesafter the stress movement of Italian galleries, artists, auction houses and art market participants. Italy’s Culture Minister Alessandro Giuli said in a statement that tax breaks should make “the entire art ecosystem, one of the most important bastions of our cultural identity.”
Although the new legislation will take effect within a few days, it will need to be approved by parliament within 60 days to remain in effect permanently.
A study published earlier this year through consulting and market intelligence firm nominees estimate that cutting VAT can be seen in Italy within three years, generating €1.5 billion in three years. It also predicts that the Italian economy may therefore expand by as much as 4.2 billion euros. Nomisma, on the other hand, warned that if VAT remains at 22%, the country’s art market risk has been reduced by nearly 30%.
The lower VAT for ART transactions hit the back of a new EU rule called 2022/542, which aims to standardize the infamous complex VAT system of member states. It allows members to reduce taxes on art sales, provided that the interest rate remains at 5% or above. But for this, they must abolish the former more boring tax system.
In February, the Italian government, led by right-wing Prime Minister Giorgia Meloni, said it would not drop at 22%, and expressed concern that it would succumb to the pressure of good collectors rather than help rescue the industry. However, the turnaround comes after increasing pressure in the training department.
At the Maumat Expo in Milan in April, several dealers circulated an open letter to Meloni. It was signed by 600 artists and said high VAT threatened to turn Italy into a “cultural desert.” In addition, last year, the Apollo Group, an Italian Antiques Association, art galleries, collectors, art logistics companies and auction houses, issued a statement calling on the Italian government to reduce the VAT for selling art.
“[If the tax is not reduced] Any collector who wants to import or buy a job in the EU certainly won’t do this in Italy. ” a paper published by Apollo read.
The policy changes seem to surprise many Italian dealers. Last week, in the Art Basel in Switzerland, several such dealers shrugged just when asked if they thought the change might reach VAT. Maurizio Rigillo, co-founder of Galleria Continua who has a space in Rome, told Rome Artnews Last Wednesday. “We hope the vat will drop, which will be great. This is a huge disadvantage for us. Currently, Italian collectors are buying elsewhere in Europe.”
Despite Italy’s status as a historical and cultural power, its art market still lags behind its European neighbors. Clare McAndrew, founder of Art Economics, told Artnews According to her “conservative” estimates, Italy’s art sales were between $381 million and $425 million last year. By comparison, the 2025 Art Basel UBS Art Market report found that art sales in the UK were $10.4 billion in 2024, while France achieved $4.2 billion.
“[Italy’s high VAT] It can be said that compared with countries such as Germany and France, the European Union Directive has strategically reduced the VAT rate, thus destroying the Italian art market. ”
High sales tax is one thing for holding Italian galleries, but strict legislation that regulates the trade in cultural products is another. The release of VAT handbrakes should help mitigate the 10% drop that the Italian art market suffered in 2024 (according to the Basel UBS Art Report).
Andrea Festa, founder of the Contemporary Art Gallery of the same name Artnews Italy’s high VAT on art sales puts Italian galleries at a “competitive disadvantage”.
“We operate in a global art world, and for artists, working with multiple galleries in different countries, it is becoming increasingly common. This makes the difference in national VAT rates not to be ignored,” he said. “In addition, until recently, Italy owned one of the highest import tax burdens for European art. Now that the speed has dropped to 10%, it is certainly a welcome turnaround, even if it still puts us behind many of our European counterparts. This reform of dedication is not only helpful, but important in the moment of the art market signing.”
Galleryist Davide Mazzoleni, whose gallery of the same name has space in London and Turin, plus the gallery that will be open in Milan, said the tax cut is a “game changer that changes Italian dealers”.
“Reducing VAT to 5% will greatly increase market liquidity and have a significant overall economic impact,” he added. “So VAT reform is not only desirable, but is also crucial to the long-term sustainability and international competitiveness of the Italian art system.”
Catarina Antonaci, deputy director of the Richard Saltoun gallery in Rome, told Artnews “She is glad she can now offer more favorable conditions for collectors, which is undoubtedly a strong motivation for our market.” (Saltoun also has room in London and New York.)
Luigi Fassi, director of the Art Fair in Torino, said the Italian government finally understood that “the need to reduce VAT significantly to help maintain the integrity of Italian galleries.”
He told the few days of lower VAT Artnews: “The response of collectors will be important because expectations are getting higher and higher. In this regard, the Italian art system shows a strong unity. There is a shared desire to play an active role and maintain the extraordinary traditions of the Italian community.”
Italian auction houses are also expected to receive the benefits of reducing VAT. Agnese Bonanno, head of marketing and communications at Il Ponte Auction House in Milan, told Artnews In an email, “The coordinated VAT rate with European standards has greatly improved the structural competitiveness of the Italian art market, attracted international collectors and market operators to invest in the country while promoting more artworks.”
