Several countries apply tax incentives to promote the sale of certainworks of art, such as works of contemporary artists and works of national impor-tance. Examples include deductions for taxpayers who buy contemporary art,sometimes on the condition that the art be made accessible to the public. Althoughthese incentives are not specifically designed to incentivize art dealers, the incen-tives can have that effect by reducing net or gross prices. If the price of art isreduced as a result of tax incentives, art dealers have a competitive advantage. Otherexamples include deductions that reduce the net price of works of significant cultural heritage. Tax incentives can also directly influence the gross price. Examplesof such incentives include reduced VAT rates and customs duties, which are used inthe European Union. However, the definition of“art”is problematic in this respect.Even bigger incentives are provided in so-called free ports, which have no customsduties or transfer taxes on works of art. However, these free ports may also provideopportunities for money laundering, tax evasion, and the fencing of stolen goods.

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Fiscal Autonomy and its Boundaries
Erasmus School of Law

Hemels, S. (2017). Tax Incentives for the Art Market (Chapter 9). In Tax Incentives for the Creative Industries (pp. 175–192). doi:10.1007/978-981-287-832-8_9