The German Art Dealers Association Is Calling on the Government to Drop Sales Tax on Art to Mitigate the Market Impact of Coronavirus

The group is demanding changes in light of the postponement of Art Cologne, Germany's largest art market event.

Art Cologne 2018.

The German Association of Galleries and Art Dealers has sent out a call on the government to lower sales tax on art in order to alleviate the financial setback from the rapid spread of coronavirus.

Last Thursday, culture minister Monika Grütters said that there will be assistance from the federal government to help stabilize companies in the arts and culture sectors. But the dealer association wants the government to take things a step further, and is asking for value-added sales tax to be lowered from 19 percent, the usual rate on goods and services, to the reduced rate of 7 percent.

Yesterday, Art Cologne announced that it would postpone the preeminent German fair until September due to the outbreak of coronavirus and the subsequent lockdowns on public spaces and travel. Berlin’s museums are being closed from now until at least April 20, per a directive from the local government. Galleries across Germany, meanwhile, are calling off exhibitions.

“The German art market has suffered a severe blow from the cancellation of Art Cologne in April,” the association said in a statement. “Galleries are the gatekeepers for artists. They offer them sustainable positioning in the market and make a significant contribution to securing artists’ existence at their own economic risk and through investments, with passion and great personal commitment.”

In 2014, the government voted to exempt works of art from the reduced 7 percent tax rate that they previously enjoyed, causing an uproar within the German art market. The association of dealers calls that move a “fatal error” in their statement today, saying it has since led to the “closures of small, medium-sized and market/strong galleries” in Germany. At the time of the reversal, dealers lambasted the government, saying that collectors were just buying works from artists with international galleries in order to pay a lower price.

In 2018, a newly elected coalition government put the idea back on the table to return to a 7 percent tax on artworks, but no further action has yet taken place.

“It is long overdue to end this unequal treatment. In view of the corona pandemic and the associated slump in sales due to cancellations, breakdowns, or postponements of art fairs, events, and exhibitions, there is an additional economic hardship for galleries,” the association said. “It is necessary to cushion further dam breaks with unforeseeable consequences for the galleries.”

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