Once one of the least favorable destinations for art trading due to high taxes and strict regulations, Italy is set to slash its Value Added Tax (VAT) on art from a punitive 22 percent to just 5 percent under a new regulation taking effect this week. Its import tax will also drop from 10 percent to 5 percent, potentially making Italy one of the most attractive European countries for buying and selling art—at least from a tax perspective.
“The reduction is an important achievement for the art market,” Giuseppe Calabi, a Milan-based lawyer and an executive committee member of the Italian art stakeholders’ association Gruppo Apollo, told Observer. Calabi spent years in dialogue with Italian policymakers and believes the reform will make the Italian art market more competitive by facilitating the international circulation of art into and out of Italy. “The ultimate goal is to promote the global circulation of Italian art and culture.”
Italian gallerist Marco Poggiali of Galleria Poggiali said credit goes to Minister of Culture Alessandro Giuli, the National Association of Modern and Contemporary Art Galleries (ANGAMC) and the Apollo group, “who have resolved a long-standing issue during a difficult moment for the market: the significantly higher tax burden compared to the rest of Europe and the world. At last, the role of art has been recognized, even on a social level.” He hopes the reduction marks the beginning of a cultural and market revival that will restore Italy to its rightful place, “that of a leader, as it has historically been.”
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José Graci of Mazzoleni Gallery noted that the reform is the result of years of work involving a broad coalition of stakeholders in the art sector. “A special thank-you goes to Sirio Ortolani, president of ANGAMC, who has been our key point of reference on this issue,” he told Observer, adding that the reduction reflects a strong spirit of collaboration.” The sector is now awaiting the next regulatory steps, and he hopes implementation will take place before autumn. “In the meantime, we’re confident that art professionals and the wider industry will gain renewed competitiveness in both the domestic and international markets.”
The reduction brings Italy in step with Germany and France
The measure was also a response to the E.U.-wide VAT reform outlined in Directive 2022/542, which gave member states more flexibility with regard to setting lower VAT rates on certain categories of goods, including art. Germany had already reduced VAT on art sales from 19 percent to 7 percent, effective January 1. Meanwhile, France instituted a 5.5 percent VAT rate on art. “The adjustment of the Italian VAT to 5 percent allows industry professionals and collectors in Italy to operate within a competitive tax framework,” Elena Zaccarelli, a senior specialist of Modern & Contemporary Art at Christie’s, told Observer.
Pietro Vallone, CFO of MASSIMODECARLO, called the change “a sensible decision.” He believes the reform will not only boost sales but also invigorate the broader cultural ecosystem around contemporary art, encouraging Italian collecting and creating new opportunities for young artists in the country. “It brings us back into a context of fair competition with key European and international markets, especially France and Germany,” he said. “We must continue in this direction, and I’m pleased to note that the thresholds for free circulation have already been identified as the next objective.”
The VAT reduction comes ahead of a series of planned reforms aimed at boosting the competitiveness of the Italian art market. Although Prime Minister Giorgia Meloni initially resisted lowering the VAT, she faced pressure from the cultural sector to fall in line. At Milan’s Miart fair in April, several art dealers circulated an open letter signed by 600 artists warning that keeping the high VAT risked turning Italy into a “cultural desert.” Nicolò Cardi of Cardi Gallery sees the VAT reduction as the result of a collective effort across the Italian art sector. “There was a strong sense of unity and belief in our Italian identity within the art system,” he told Observer. “We should be proud—we’ve won a major battle, one that will have a powerful, wide-reaching impact on the market.”
A 2021 report, Art: the value of industry in Italy, released by Nomisma in collaboration with Italy’s leading bank, Intesa Sanpaolo, found that even before the pandemic, the Italian art market was experiencing an alarming contraction, with a steadily declining number of art galleries (now 1,618) and antique dealers (1,637), largely due to falling sales and the country’s standard VAT of 22 percent—the highest in Europe. After measuring the economic impact of art sales on Italy, the study found that in 2019, the country recorded a total turnover of €1.46 billion. Given a multiplier of 2.60, the resulting economic activity—spanning both direct and indirect suppliers as well as household consumption—pushed the overall impact to €4 billion. While Italy’s art market currently accounts for just 1 percent of the global total, Nomisma projects that the VAT reduction could help the country’s galleries, antique dealers and auction houses to generate an additional €1.5 billion over the next three years. This would, in turn, boost the broader economy—including indirect suppliers and household spending—potentially reaching up to €4.2 billion.
Dealers and buyers face barriers beyond the VAT
Even with a more favorable tax rate, Italy continues to enforce strict export regulations, leading to lengthy bureaucratic procedures that have long discouraged international art trade. A formal export permit is still required for any artwork over 70 years old and valued above €13,500. Even works by deceased artists under 70 years old and artworks below the €13,500 threshold must be registered through the SUE system (Sistema Informativo Uffici Esportazione), which involves submitting photographs and a detailed description, and the Export Office can still flag a work if it is deemed to be of exceptional cultural interest.
Similar import and export constraints—with all the same legal, administrative and financial burdens—are set to be mirrored across the E.U. Regulation (EU) 2019/880, which goes into effect on June 28, requires auction houses, galleries and antique dealers throughout the bloc to provide detailed provenance research and documentary evidence for all cultural goods over 200 years old originating from outside the E.U. While intended to combat illicit trafficking, the regulation is expected to introduce significant administrative challenges for the European art market, particularly in the antiquities and decorative arts sectors.
According to the Nomisma report, Italy’s leading art fairs had a direct economic impact of €68.1 million in 2019, driven by spring and autumn editions of Mercanteinfiera in Parma, miart in Milan, Arte Fiera in Bologna, Artissima in Turin, Modenantiquaria in Modena and BIAF in Florence—the country’s most important fair for ancient art. But among the key challenges identified by Italian dealers are expanding their client bases to reach foreign buyers (72 percent), forging new commercial relationships (69 percent) and—no surprise here—competing with the more favorable tax rates of other European countries and non-European markets such as the U.K.
Whether the VAT reduction will transform cities like Milan into major European art hubs, as some have suggested, and whether Italian fairs such as miart and Artissima can be re-established as truly international events, remains to be seen. In 2024, Artissima featured 189 galleries from 34 countries across four continents, including 37 first-time participants—many offering fresh perspectives from the Global South. The latest edition of miart, in April 2025, featured 179 galleries from 30 countries across five continents. Yet according to many collectors and industry professionals, Italy’s two main fairs have become more provincial since the pandemic, with fewer international collectors making the journey to the country (with the Venice Biennale being the notable exception).