Italy: Reduced VAT of 5% on Works of Art from July 2025 – A Turning Point for the European Art Market

As of July 1, 2025, Italy will apply a single reduced VAT rate of 5% on the sale and import of works of art, collectibles, and antiques. This reform, made possible by EU Directive 2022/542, positions Italy as the most attractive market in Europe for art sector players: galleries, dealers, collectors, and artists.

From July 1, 2025, Italy marks a decisive turning point on the European art scene by drastically reducing the VAT rate applicable to the sale and import of works of art, collectibles, and antiques from 22% to 5%. This measure, adopted by the Council of Ministers on June 20, 2025, under Article 9 of Decree-Law No. 95/2025 (the so-called “Omnibus” law), represents a historic tax reform aimed at revitalizing the domestic market and strengthening Italy’s role as a leading cultural and economic player on both the European and global stage.

A Reform Enabled by European Law

This initiative was made legally possible thanks to Directive (EU) 2022/542 of April 5, 2022, which amended Directive 2006/112/EC on VAT, allowing Member States to introduce new reduced rates for specific categories of goods and services. However, EU regulations impose certain limits: each Member State may apply such reduced rates to a maximum of 24 categories among the 29 listed in Annex III of the directive.

Within this framework, the 5% VAT on artworks was introduced in pursuit of public interest objectives, consistent with the cultural and social purpose of the measure. Works of art, collectibles, and antiques were expressly added to the list of eligible goods, reinforcing the legitimacy and consistency of Italy’s move.

Technical Details: What Does the Reform Actually Change?

Article 9 of Decree-Law No. 95/2025 completely reforms the VAT regime applicable to the art sector through three coordinated measures:

• Abolition of the previous regime: Both item No. 127-septiesdecies) of Table A, Part III, annexed to DPR No. 633/1972, and Article 39 of Decree-Law No. 41/1995 are repealed. These provisions provided for a reduced rate of 10%, but only for imports or sales made directly by authors or their heirs.
• Introduction of a uniform 5% rate: The new item No. 1-nonies) of Table A, Part II-bis, of DPR No. 633/1972 extends the reduced rate to all sales of works of art, antiques, and collectibles, regardless of the seller’s identity.
• Extension to intra-EU acquisitions: Under Article 43, paragraph 5 of Decree-Law No. 331/1993, intra-EU acquisitions of these goods also benefit from the 5% rate.

Which Goods Are Covered by the New Reduced Rate?

The 5% rate applies to all goods listed in letters a), b), and c) of the annex to Decree-Law No. 41/1995:

• Letter a) – Works of art: This includes paintings, collages, drawings, and original paintings created entirely by the artist (excluding architectural, engineering, industrial, or topographical designs), original engravings, prints, and lithographs made by hand, original sculptures and statuary works by the artist, casts limited to eight copies, hand-made tapestries and wall hangings (limited to eight copies), unique ceramics signed by the artist, enamel works on copper (signed and numbered, max eight copies), and original photographs produced and printed under the artist’s supervision (signed and numbered, max 30 copies).
• Letter b) – Collectibles: This includes stamps, postal marks, first-day covers, as well as collections of zoological, botanical, archaeological, historical, paleontological, ethnographic, or numismatic interest.
• Letter c) – Antiques: All goods other than those mentioned above, provided they are over one hundred years old.

Who Benefits from the 5% Reduction?

The entire art sector directly benefits from this VAT reduction: the reduced rate applies to sales by VAT-registered businesses—such as galleries, auction houses, and art dealers—as well as to sales made by artists themselves or their heirs, and to imports of artistic goods from abroad.

Thanks to more competitive prices, this measure is expected to significantly increase art transactions both domestically and internationally. Italy becomes more attractive than its neighbors: France set its reduced rate at 5.5% at the end of 2023, and Germany at 7%, effective January 1, 2025. With its 5% rate, Italy is now the most competitive country in Europe in this field.

Economic Projections: A Growth Driver

According to a study by Nomisma (“In Italia il mercato dell’arte è in difficoltà e risente anche dell’aliquota IVA più alta in Europa,” March 27, 2025), the reform promises considerable economic effects:

• Small galleries could see revenues increase by up to 50%;
• The sector as a whole could experience a 28% increase in activity, amounting to €1.5 billion in just one quarter;
• The overall impact on the Italian economy is estimated at around €4 billion.

Thus, this measure has a dual dimension: cultural, as it promotes the circulation and accessibility of art, and economic, as it stimulates employment, production, and the competitiveness of a sector closely linked to Italy’s international image.

A Systemic Tax Measure

The VAT reform introduced by Decree-Law No. 95/2025 is not just a technical adaptation to EU law: it is part of an ambitious strategy to enhance Italy’s cultural and economic identity. It recognizes the value of art not as a luxury reserved for an elite, but as a good of public interest, a driver of growth, and a tool for international visibility.

As of July 1, 2025, Italy positions itself as a new major hub for art market players, boosting the competitiveness of its galleries, supporting its artists, and offering new opportunities to its collectors. A tax measure, yes—but one with strategic vision and systemic cultural ambition.

On the photo: Qing dynasty Chinese vase, sold for €7.5 million at a Pandolfini auction in Florence. A double record: the most expensive work ever sold at auction in Italy, and the most lucrative auction sale ever recorded in the country.