Taxation in the
circulation of artworks

The art market is configured not only as a cultural and professional sphere for artists and curators, but also as a significant economic sector, capable of attracting the interest of investors, collectors, institutions, and professionals. However, the tax and regulatory framework governing its dynamics is heterogeneous at the international level, with significant differences from one legal system to another. In this context, a comparative analysis proves essential to identify opportunities and address the challenges that characterize cross-border operations in the art world.

In an effort to provide a comprehensive overview, several of the most relevant countries — both European and non-European — have been examined in order to understand how different legal and tax systems relate to the circulation, ownership, and transfer of works of art.

Section prepared by Studio Lombard DCA

Individuals

In the Netherlands, artworks are subject to personal income tax only if held as an investment. In such cases, the income generated from the sale of the artwork falls under income from savings and investments (so-called Box 3), subject to a fixed tax rate of 36% in 2025 .

In 2025, the system provides for a 36% tax on the presumed return of net assets, calculated as follows:

Up to €57,684: presumed return of 1.44%;
From €57,684 to €1,013,000: presumed return of 4.86%;
Over €1,013,000: presumed return of 5.39%.

Artworks fall under this taxation if their total value exceeds the exemption threshold of €57,684. However, if the artworks are used exclusively for personal purposes (e.g., as home decoration) and not as an investment, they can be excluded from this taxation. In such cases, personal use must be predominant, meaning that at least 70% of the use is personal, and there is no investment intent. In other words, capital gains from the sale of artworks are considered included in the weighted notional return and are therefore not taxed separately.

If an individual regularly buys and sells artworks in such a way as to be considered a business activity, the income realized from the sale of the artworks falls under income from employment and home (so-called Box 1) and is taxed at progressive rates (generally starting from 37.10% for incomes up to €68,507 and 49.50% for incomes over €68,507).

Legal Entities

In the Netherlands, only entities that carry out commercial activities are subject to corporate income tax; otherwise (such as, for example, foundations that do not carry out commercial activities), the entity is considered transparent for CIT purposes: the activities and liabilities of such an entity are subsequently attributed to the ultimate beneficiaries. Furthermore, entities with capital divided into shares are always subject to corporate income tax.

The corporate income tax rates in the Netherlands for the year 2022 were as follows:

15% on profits up to €395,000;
25.8% on profits exceeding that amount .

These rates apply to profits derived from the sale of artworks, provided that the activity is considered commercial. Expenses directly connected to the commercial activity, such as acquisition costs and operating expenses, are generally tax-deductible, thereby reducing the taxable income.

Some entities, such as fiscal investment institutions (FBI), can benefit from a corporate income tax rate of 0%, provided that profits are distributed to participants within eight months after the end of the fiscal year. Additionally, entities with capital divided into shares are always subject to corporate income tax.

Comparison Between Natural and Legal Persons: From a Tax Perspective, Who Benefits More from the Ownership and Sale of Artworks?

In the Netherlands, since there is no exemption applicable to artworks held by a legal entity, it is more advantageous to hold artworks privately, especially when they are not held as an investment.

Taxation on Inheritance and Donations

In the Netherlands, inheritance or gift tax is levied on the total value of assets received by a person residing in the Netherlands at the time of the donation or death. The place of residence or nationality of the person receiving the assets is irrelevant.

The tax rate is as follows:

For assets received from "fiscal partners" or parents: 10% up to €154,197 and 20% for amounts exceeding that;
For assets received from grandparents: 18% up to €154,197 and 36% for amounts exceeding that;
For assets received from other individuals: 30% up to €154,197 and 40% for amounts exceeding that Taxsight.

Public benefit organizations are exempt from inheritance or gift tax on inheritances and donations that the institution uses in the public interest.

There is the possibility to pay part of the inheritance tax due with the artworks received. This possibility, defined as a "remission agreement," is advantageous because the inheritance tax due is credited with an additional 20% on the market value of the artworks used to pay the assessment. The regime applies to artworks of national historical-cultural or historical-artistic interest .

Special Tax Provisions for Trusts and Foundations

In the Netherlands, the transfer of assets through trusts is subject to inheritance and gift tax. Upon the death of the settlor, the beneficiary inherits the trust's assets and, consequently, is subject to inheritance tax.

Generally, donations to non-profit foundations are subject to gift tax; however, in some specific cases where foundations are used to separate legal ownership from the economic ownership of certain assets, they are considered transparent for tax purposes. Under certain conditions, a foundation is disregarded for inheritance and forced heirship rules.

VAT on Domestic Transactions

Sale within national borders

VAT for the sale of artworks

21%

VAT reduced to 9%

if the seller is the artist or an entitled supplier

In the Netherlands, the general VAT rate is 21%.

However, if artworks are sold by the artist (or by a person acting on their behalf, e.g., in the case of inheritance) or by a supplier entitled to full input VAT deduction, the applicable VAT rate is 9% .

If the artwork is sold through the intermediation of a gallery, the gallery must, in principle, apply the general VAT rate of 21% on its intermediation commission.

If the reduced VAT rate is not applicable, it is possible to apply the special provision that allows VAT to be calculated only on the profit margin, determined based on the difference between the total amounts paid and received in the period to which the VAT return refers. The VAT paid as input VAT cannot be deducted. This provision applies in the case of sales through intermediaries (galleries, art dealers, etc.) or auctions. However, the seller can still opt for the normal provision and calculate VAT based on the compensation received for the sale of the artworks and thus deduct the input VAT.

Art dealers can also opt for the margin scheme, which allows VAT to be applied only on the difference between the sale price and the purchase price of the artwork (the profit margin), instead of on the entire sale price .

VAT and Customs Duties on Cross-Border Transactions

Sale outside national borders

VAT on the importation of artworks

Exports are generally exempt from VAT

In the Netherlands, the importation of artworks is subject to a VAT rate of 9%, provided that the requirements for applying this reduced VAT rate are met. This rate applies to specific goods and services, including artworks, as indicated in the Dutch VAT rate guide .

Regarding sales of artworks to other EU member states, the VAT treatment depends on the nature of the buyer:

VAT-liable buyer (business): the transaction can be treated as an intra-community supply, where VAT is applied in the destination country.
Non-VAT-liable buyer (private individual): VAT is generally applied in the supplier's country.

Alternatively, resellers can opt for the margin scheme, which allows VAT to be calculated only on the profit margin, determined by the difference between the sale price and the purchase price. However, it is important to note that, according to the ruling of the EU Court of Justice (case C-180/22), the VAT paid on the intra-community purchase cannot be deducted and must be included in the taxable base of the subsequent resale.

Finally, the sale of artworks to non-EU countries is generally exempt from VAT, as provided by national VAT legislation in accordance with the EU VAT Directive.

Tax Incentives for Patronage

In the Netherlands, donations to cultural institutions entitle donors to tax deductions, up to a maximum limit of 10% of gross income. If the beneficiary organization is a recognized public benefit institution, tax relief can reach up to 150% of the donation amount (with a maximum limit of €2,500 more than the donated amount) .

Donations by businesses to public institutions are deductible from taxable business income up to a limit of 6%.

Anti-Money Laundering

In the Netherlands, the art market is subject to specific anti-money laundering regulations, in line with European directives. These measures apply to entities such as galleries, art dealers, auction houses, and other sector operators, especially in the case of transactions that reach or exceed the threshold of €10,000, even if divided into multiple related operations .

Operators in the sector are required to identify clients, verify the identity of beneficial owners, and, in the presence of suspicious operations, report them to the Financial Intelligence Unit (FIU-Nederland). Additionally, the regulations require that all collected information be retained for at least five years, to ensure the traceability of operations.

Failure to comply with these obligations can result in administrative sanctions and, in more serious cases, criminal penalties. These rules aim to strengthen transparency and prevent the use of the art market for illicit purposes, such as money laundering or terrorist financing.

Regulatory Updates

In the Netherlands, a draft law is currently being developed to implement the European regulatory package on anti-money laundering, known as the “European AML package.” Its submission to Parliament is expected in early 2026. Meanwhile, starting from 2025, new requirements have been introduced that raise the quality standards for Suspicious Activity Reports (SARs), requiring financial institutions to provide more detailed and relevant information in order to strengthen the effectiveness of the anti-money laundering framework.

Taxation in the circulation of artworks

Taxation in the
circulation of artworks