A work of art bears 5.5 per cent VAT, unless the gallery sells on its margin.

Two paintings at the same price, in the same Paris gallery, can carry different tax. One invoice may show no tax at all. Nothing has gone wrong. French law sets the reduced rate against the margin scheme, and one fact about the gallery decides which applies.

Published by ArtisDomus, written by Polina Surina.

That fact is who sold the work to the gallery.

Article 278-0 bis of the Code général des impôts charges VAT at the reduced rate of 5.5 per cent on the items it lists. Its paragraph I covers supplies of works of art, collectors’ items and antiques, as defined in article 297 A (I, 1°, second sub-paragraph). The same sentence adds the exception: the reduced rate does not apply where the taxable base is set under article 297 A.

That exception is the whole difficulty. Where the base is the dealer’s margin, the reduced rate is not available, and the sale falls to the normal rate of 20 per cent (art. 278).

The current version of article 278-0 bis has been in force since 1 March 2026, as amended by article 81 of law no. 2026-103 of 19 February 2026. Ordonnance no. 2025-1247 of 17 December 2025 repeals these provisions from 1 January 2027 (art. 9, 27°, art. 15 and art. 49).

One point on geography. In Guadeloupe, Martinique and Réunion, the normal rate is 8.50 per cent. The reduced rate there, for operations under articles 278-0 bis to 279-0 bis A, is 2.10 per cent (art. 296, 1°, a and b). All other figures apply to metropolitan France.

Article 297 A leaves the definition of works of art, collectors’ items and antiques to a decree. That decree is article 98 A of annexe III to the Code général des impôts, and its paragraphs II to IV form a closed list. A work outside the list does not get the reduced rate, whatever the catalogue calls it.

So the edition size, the signature and whose hand made the work are tax facts first and connoisseurship second. A buyer who asks for the edition number is asking something the invoice depends on.

A work bought from another EU country (an intra-Community acquisition) or imported from outside the EU takes the rate that applies to a sale of the same goods in France (art. 278-0 B, I). So the reduced rate of 5.5 per cent applies to them too. This version of article 278-0 B has been in force since article 32 of law no. 2025-127 of 14 February 2025.

Two cases fall outside that. First, the seller in the EU country of departure may be under a small business exemption. Bringing the work into France is then not an intra-Community acquisition, and it is not taxed (art. 256 bis, I, 1°). Second, an intra-Community acquisition is not taxed where the seller is a taxable dealer who applied that country’s margin scheme to the sale there (articles 312 to 325 or 333 to 341 of Directive 2006/112/EC).

When a sale straddles a change in the law, the chargeable event decides which rules apply. For a supply of goods it occurs when the supply is made (art. 269, 1, a). For an import it is when the goods count as imported within article 291, I, 2 (art. 293 A).

A taxable dealer who resells second-hand goods, works of art, collectors’ items or antiques is taxed on the margin: the sale price minus the purchase price. This applies where the dealer bought the goods from a person not liable for VAT, or from a person not entitled to invoice VAT on that sale (art. 297 A, I, 1°). When those conditions are met, the scheme applies automatically.

Two kinds of seller put the gallery inside the scheme. The first is anyone not liable for VAT at all, which covers a private collector and a non-taxable legal person. The second is a seller not entitled to invoice VAT on that sale. That covers a seller under the small business exemption, and another taxable dealer whose own sale was taxed on the margin.

Public auctions follow the same logic (art. 297 A, I, 2°). This covers a taxable person who sells at public auction in their own name for such a seller. The base is then the total price paid by the successful bidder, minus the net amount that taxable person pays to the seller. The base may also be worked out globally for each return period instead of sale by sale, and this method gives no right to a refund of tax (art. 297 A, II).

Two more articles decide what the buyer sees. A dealer using article 297 A may not show VAT on the invoice (art. 297 E). The buyer cannot deduct the VAT included in the price of goods taxed under article 297 A (art. 297 D, I, 1°). And the dealer cannot deduct the VAT on their own purchase, intra-Community acquisition, import or self-supply of those goods (art. 297 D, I, 2°).

So a margin invoice has no tax line, by design, and a business buyer recovers nothing from it.

Under the finance law for 2024, the reduced rate of 5.5 per cent applies to all supplies of works of art, collectors’ items and antiques, except those under the margin scheme. It applies where the chargeable event falls on or after 1 January 2025 (art. 83, law no. 2023-1322 of 29 December 2023). The date to quote is 1 January 2025, when the rule took effect.

The same article repealed article 297 B from 1 January 2025. Article 297 B had let taxable dealers elect for the margin scheme when reselling goods bought at the reduced rate. Where the chargeable event falls on or after that date, such resales can no longer go under the margin scheme by election. Elections made during 2024 lapsed on 1 January 2025.

In short, a taxable dealer who had the reduced rate when importing or acquiring a work of art, collectors’ item or antique cannot then sell it on the margin. A dealer who imports a painting at 5.5 per cent has used up the choice.

Three more cases can never go on the margin. The first is the resale of imported goods. The second is goods bought from a taxable person who invoiced VAT on the sale. The third is goods that were the subject of a taxable intra-Community acquisition.

One route stays open, in the other direction. For any single sale of second-hand goods, works of art, collectors’ items or antiques, the taxable dealer may apply the normal rules for other taxable persons (art. 297 C). The dealer then taxes the full price, and the sale gets the reduced rate of 5.5 per cent. So a gallery inside the margin scheme can leave it for a given sale, and a buyer who wants a deductible tax line can ask.

Ask the gallery who it bought the work from. If it bought from the artist, or from any taxable person who invoiced VAT, article 297 A does not apply and the whole price bears 5.5 per cent. If it bought from a private collector, from a seller under the small business exemption or from another dealer selling on the margin, article 297 A applies automatically. The reduced rate is then excluded, and 20 per cent falls on the margin with nothing shown on the invoice.

In the purchases the practice reviews, one fact decides the tax. Buyers never ask about it, and inventories never record it. It is the status of the person who sold the work to the gallery. Price, date and medium decide nothing here. One question before signing settles it.

A summary of the law. It is not legal or tax advice.