With Decree-Law of 20 June 2025, No. 132 (the so-called “Omnibus” Decree), the Italian legislature introduced a significant change to the VAT treatment of works of art, antiques and collectors’ items, providing for the application of a reduced rate of 5% with effect from the day following publication in the Official Gazette (21 June 2025). The measure forms part of the transposition of EU Directive 2022/542, which permits Member States to apply reduced rates to cultural goods and services, thereby promoting fiscal harmonisation of the sector at European level.

Regulatory Framework: From the Differentiated Regime to a Uniform 5%

Previous legislation

Until 20 June 2025, VAT in the arts and cultural sector followed a subjective criterion, distinguishing between:

  • Rate of 10%: for supplies made by authors, heirs or legatees, as well as certain imports, pursuant to item 127-septiesdecies of Table A, Part III, annexed to Presidential Decree 633/1972 and Article 39 of Decree-Law 41/1995;
  • Standard rate of 22%: for supplies made by galleries, art dealers and auction houses, unless the margin scheme applied.

This approach discouraged transactions through professional channels and pushed part of the market abroad or into less fiscally transparent areas.

Changes introduced by Decree-Law 132/2025
Article 8 of the “Omnibus” Decree provides for:

  • The extension of a single rate of 5% to all supplies and imports of works of art, antiques and collectors’ items;
  • The abolition of the subjective criterion: it no longer matters who the supplier is (artist, gallery, auction house or collector);
  • Incompatibility with the margin scheme: those who apply the latter continue to remit VAT calculated on the difference between the sale and purchase price, but may not benefit from the reduced rate.

Systemic Effects and Economic-Fiscal Rationale

The 5% rate represents a virtuous alignment with the choices made by other EU countries (France at 5.5%, Germany at 7%) and serves three objectives:

  • Regulatory simplification: overcoming a layered and fragmented system;
  • International competitiveness: Italy becomes one of the most favourable jurisdictions for art purchases, stimulating foreign investment;
  • Transparency and formalisation: encouraging the traceability of art transactions by reducing recourse to parallel channels.

According to Nomisma estimates, the measure could generate an increase in sector turnover of up to 28%, with peaks exceeding 50% for small galleries, and an overall economic impact in the order of 4 billion euros.

The Margin Scheme: Continuity with Limitations

The margin scheme (Articles 36–40 of Decree-Law 41/1995) remains applicable but is incompatible with the 5% rate. It follows that:

  • Operators who continue to operate under the margin scheme (e.g. galleries reselling second-hand works or works acquired from private individuals) may not apply the reduced VAT rate;
  • To access the new 5% rate, it is necessary to exit the margin scheme, with the consequent application of the tax to the full value (albeit at the reduced rate).

The trade-off between a full taxable base with reduced VAT and a reduced base with standard VAT must be assessed on a case-by-case basis, taking into account margins, cost structure and strategic pricing.

Implications for Tax Professionals: Areas for Action

Effective date
The provision is operative from 21 June 2025. Transactions concluded from that date must be documented with the correct rate. Invoices issued in respect of contracts concluded prior to that date but with delivery occurring thereafter must take into account the date on which the transaction was carried out.

Software and procedure updates
Taxable persons must:

  • update VAT codes in management systems and electronic invoicing platforms;
  • review price lists and contractual terms, in particular for sales already planned;
  • train staff on regulatory developments and invoicing procedures.

Imports and customs compliance
The reduced rate must also be applied at customs, following the correct classification of goods under the Combined Nomenclature. It is advisable to liaise with the customs agent and update the XML formats for import VAT.

Exports: an unresolved issue
Authorisation procedures for the export of cultural property over one hundred years old remain unchanged and continue to impede the free flow of the market. Despite the fiscal opening, a rigid bureaucratic framework persists, hindering the full valorisation of Italian art on global markets.

Outlook and Open Issues: Towards Structural Reform?

The measure, whilst positive, presents grey areas that will need clarification:

  • The arrangements for coordination between the reduced VAT rate and other special regimes (e.g. the exemption under Law 398/1991 for smaller entities);
  • The treatment of advance payments made prior to the reform;
  • Any simplification of the margin scheme or its gradual abolition;
  • The implications for non-commercial entities selling works of art in museum or exhibition contexts.

An implementing circular from the Revenue Agency (Agenzia delle Entrate) is expected by July 2025, which should clarify these aspects.

Conclusions

The 5% VAT on art marks a paradigm shift in the fiscal treatment of cultural goods in Italy. It represents an economic policy lever that, if accompanied by operational simplifications and a strategy for the structural development of the sector, has the potential to transform the country into a leading artistic hub for collectors, investors and creators alike.