Italy’s art market is facing a critical phase as a result of recent legislative decisions that risk penalising operators in the sector further. This article, originally published by Massimiliano Silla, independent financial adviser, analyses the implications of Legislative Decree 201/2024 and its failure to deliver fiscal and regulatory reform.

Why are Italian art market operators relocating abroad?

Legislative Decree D.lgs. 201/2024, which was intended to introduce relief measures for the cultural sector, failed to reduce VAT on works of art, leaving it at 22%. This renders Italy less competitive than countries such as Germany (7%) and France (5.5%), pushing gallery owners, artists and other professionals to move their operations abroad in order to benefit from more favourable rates.

What are the VAT rates on art in Italy compared with other European countries?

In Italy, VAT on works of art is set at 22%, one of the highest in Europe. Germany and France, by contrast, apply reduced rates of 7% and 5.5% respectively. This fiscal imbalance penalises the Italian market, incentivising operators to sell and purchase artworks in countries with more favourable tax regimes.

How does Legislative Decree 201/2024 affect the free movement of works of art?

The decree did not amend the value threshold for the free movement of works of art, which remains at €13,500. In other European countries, such as France and the United Kingdom, this threshold is significantly higher, thereby simplifying international trade. The rigidity of Italian regulations makes transactions more cumbersome, undermining the competitiveness of the domestic market.

Which professional categories are affected by these legislative choices?

The government’s decisions affect the entire art supply chain: artists (who struggle to sell at competitive prices), gallery owners (compelled to operate abroad), restorers (with fewer commissions linked to the domestic market) and art fairs (which lose international appeal owing to regulatory obstacles).

Why is the €13,500 threshold problematic for the art market?

Such a low threshold obliges operators to follow complex bureaucratic procedures for works valued above that figure, including certifications and authorisations. In countries such as France, higher thresholds (above €50,000) facilitate trade, attracting foreign investors and collectors at Italy’s expense.

What are the long-term consequences for the Italian art system?

The combination of high VAT and restrictive rules on the free movement of artworks risks:

  • Reducing the volume of transactions in the domestic market;
  • Shifting the focus of investment activity abroad;
  • Weakening Italy’s presence at international fairs and events;
  • Damaging the protection of the artistic heritage, with fewer resources available for conservation.

Are there proposals to address these shortcomings?

Sector experts have long called for alignment with European regulations, including a reduction in VAT to at least 10% and an increase in the free-movement threshold to €50,000. However, Legislative Decree 201/2024 disregarded these requests, leaving Italy’s art system at a competitive disadvantage.

Conclusion

The government’s choices set out in Legislative Decree 201/2024 risk accelerating the flight of professionals and capital from the Italian art market to overseas destinations.