The rate is 5.5%. This Sales tax is not passed on to the buyer. It is settled at the customs administration by the auctioneer. As for the basis of this tax, it is equal to the sum received by the seller, increased by certain costs incurred on the occasion of importation.
Great Britain obtained a derogation allowing it to apply, until June 30, 1999, to imports of goods created before 1973, a Sales tax at a reduced rate of 2.5%. The use of the online sales tax calculator is important.
This has two consequences:
A new incentive for foreign sellers to choose London rather than Paris and, more generally, the United States rather than Europe: in New York, a “sales tax” applies, very easy to dodge, since it suffices to have the goods delivered to neighboring states which do not practice it.
- Risks of deflection of traffic between London and Paris, objects tending to benefit from a 3% Sales tax differential to transit through London before possibly arriving in country.
- However, this handicap must be qualified by the fact that, most often, goods intended to be sold at auction are brought into country under the temporary admission regime, for a maximum period of two years, with suspension of taxes. In the event of re-exportation after the sale, no tax is due.
The auctioneers can obtain facilities from the customs administration so as to have to pay in these cases only a fraction of the sum that would be due if the buyer turns out to be a Community national.
The 7th European directive authorizes the application of a reduced rate of Sales tax on imports on works of art is at the origin of another distortion due to the fact that certain objects commonly sold at auction are not part of the market of art within the meaning of directive 55. Jewelry, but also manuscripts and furniture less than 100 years old, are subject to the standard rate of 20.6%. This resulted in the migration of the jewelry market to Geneva, where the applicable Sales tax rate is 6.5% another example, Art Deco furniture from country will not return for a long time, because importation would be prohibitive.
Apparently Great Britain is very determined to avoid an alignment of its Sales tax rate, the first step of which would explain, according to the British Art Market Federation, a decrease of almost 40% in the amount of British imports of works of art.
Internal Sales tax
The seventh directive which regulates in particular the imposition of Sales tax on sales and imports of works of art, antiques or collectibles was transposed by the aforementioned law of 29 December 1994. This law enshrines the margin regime as the common law regime for these transactions.