Collector tax matters: what the dealer needs to know to sell better

01Wealth tax exemption: a powerful argument

In France, artworks are fully exempt from the Impôt sur la Fortune Immobilière (IFI), the wealth tax that replaced the ISF in 2018. The exemption is total and unconditional: regardless of a collection's value, artworks are excluded from the IFI tax base. For a taxpayer subject to this levy, buying art constitutes a placement that escapes wealth taxation, unlike property or financial investments.

This argument is particularly potent with collectors investing significant amounts. A collector who owns a collection valued at five hundred thousand euros avoids the taxation the same amount would attract if invested in real estate. A dealer who mentions this point — without substituting for tax advice — opens a door the collector may not have considered.

02Capital gains taxation on resale

The resale of an artwork is subject to specific taxation in France. The seller may choose between two regimes. The flat-rate regime imposes a tax of six point five per cent on the total sale price (including social contributions). The real-gains regime allows the seller to declare the actual capital gain (sale price minus purchase price and costs) and subject it to income tax at thirty-six point two per cent, with a five per cent annual reduction beyond the second year of ownership, resulting in full exemption after twenty-two years.

The dealer should know this choice without entering into calculations. The useful information for the sale is as follows: a collector who holds a work for more than twenty-two years will pay no capital gains tax on resale. This long horizon, which corresponds to the natural temporality of a collection built over time, is an additional argument for purchase.

03Inheritance rights and transmission

Transmission of an art collection is subject to inheritance duties under the same conditions as other assets. However, the valuation of artworks for calculating inheritance duties benefits from specific rules. The taxpayer may choose between the market value estimated on the date of death and a flat-rate of five per cent of the gross estate value. For high-value collections, expert valuation is generally more favourable.

Dation en paiement is a mechanism unique to French tax law. Heirs may propose to settle all or part of their inheritance duties by handing over artworks of heritage significance to the state. Numerous major works have entered French public collections through this mechanism, including Picassos at the Musée Picasso and Cézannes at the Musée d'Orsay. A dealer who informs their collector of this possibility renders a service that extends beyond the scope of the sale.

04The case of corporate buyers

Companies acquiring works by living artists benefit from a significant tax advantage in France, provided by Article 238 bis AB of the General Tax Code. The purchase can be amortised over five years in equal instalments, provided the work is displayed in a space accessible to employees or the public throughout the amortisation period.

This provision substantially reduces the net cost of acquisition. For a company subject to corporation tax at the standard rate of twenty-five per cent, amortising a ten-thousand-euro work yields a tax saving of two thousand five hundred euros over five years — a net cost of seven thousand five hundred euros.

A dealer who knows this mechanism and can explain it clearly to business executives holds a considerable commercial advantage. The tax argument should not be the primary motive for purchase — the company should want the works for themselves — but it facilitates the decision and the commitment to buy.

05VAT on artworks

The VAT regime applicable to artworks in France is a complex subject whose broad outlines the dealer should know. Since 1 January 2025, the reduced rate of five point five per cent applies to every supply of works of art — imports, sales by the artist or their successors, and resales by galleries (Directive (EU) 2022/542, transposed by the French finance act for 2024). Before that reform, sales made by a gallery were subject to the standard rate of twenty per cent, with an option for margin-scheme VAT; since 2025 the margin scheme is no longer available for works acquired at the reduced rate, and selling at five point five per cent on the full price has become the rule (analysis by the Comité Professionnel des Galeries d'Art).

The margin scheme is advantageous when the gallery resells a work acquired from a private individual or a non-VAT-registered artist, because the tax base is reduced to the profit margin alone. The dealer should consult their accountant to determine the most favourable regime for each transaction.

06Individual patronage

Individuals who make donations to cultural organisations of general interest benefit from an income tax reduction of sixty-six per cent of the donation amount, up to twenty per cent of taxable income. This provision does not apply directly to gallery purchases, but it can be mobilised when a collector donates a work to a museum or foundation.

A dealer who assists a collector with a donation project to a museum renders a triple service: to the museum, which enriches its collections; to the collector, who benefits from the tax advantage and the satisfaction of contributing to the public patrimony; and to the artist, whose work gains visibility and institutional legitimacy. Galerie Kamel Mennour and Galerie Perrotin have facilitated numerous donations to French museums, thereby strengthening the links between their programmes and public institutions.

07Selling internationally: rules to know

Sales to collectors within the European Union benefit from free movement of goods. Sales to collectors outside the EU involve customs formalities and, in some cases, export certificates for works exceeding certain age and value thresholds.

A dealer selling internationally must know the basics of customs regulation and be able to reassure the collector that the process is smooth. Contemporary works by living artists are rarely subject to export restrictions, but twentieth-century works, historical photographs and old master prints may require a certificate of free circulation issued by the Ministry of Culture.

For galleries on Artedusa, the platform facilitates connections with international collectors, and knowledge of basic tax and customs rules enables the dealer to respond professionally to questions that naturally arise during a cross-border purchase.