Government offers incentives in bid to revive market
But trade is disappointed by lack of significant tax breaks to encourage collecting and donations
By The Art Newspaper. Market, Issue 191, May 2008
Published online: 01 May 2008
PARIS. France’s culture minister Christine Albanel announced proposals to shake up the French art market last month, at a time when the country has reportedly lost its third-place ranking in worldwide sales to China (The Art Newspaper, February 2008, p39).
Ms Albanel was responding to a government-commissioned report published in March on developing France’s art market, written by Martin Béthenod, Fiac’s fair manager. He based it on research with dealers, auction houses and museums.
Ms Albanel’s proposals mainly dealt with auction houses. She said that they should now be able to conduct private sales, sell works that they own and make vendor guarantees, as is the case in many other countries, including the UK. This part of her plan was broadly welcomed by the auction houses.
However, other aspects of the plan were seen as vague and uninspiring. Many dealers had hoped that Ms Albanel would offer incentives for collectors, building on the tax advantages introduced in 2002-03 to keep major works in the country. In his report, Mr Béthenod made around 20 recommendations, including making a portion of a work’s purchase price tax deductible for individual collectors and using the purchase of a work of art to offset income tax, similar to France’s payment-in-kind system for inheritance tax.
Ms Albanel did, however, propose the introduction of an interest-free loan to buy art, similar to Britain’s Art Council’s “Own Art” programme launched in 2004, or the Netherlands’ Kunst Koop (Art Sale) scheme.
But in his report, Mr Béthenod distanced himself from this type of loan. “These examples did not appear particularly relevant to us,” he wrote. “At the upper end of the market, galleries rely heavily on offering loyal clients the ability to buy works in instalments anyway. To formalise such a mechanism, despite its possible benefits at the lower end of the market, risks depriving galleries of a useful marketing tool.” It would be harder to encourage loyalty from a client with the offer of an interest-free loan, if that loan were available through the state.
Ms Albanel said there were a number of tax recommendations in Mr Béthenod’s report that she would like to see implemented. This includes widening the 2003 law which enables companies that buy and exhibit works by living artists to deduct the purchase price from their taxable profit. Under the current law, the ceiling for tax deductions for such works is 0.5% of a company’s turnover: Mr Béthenod proposed a threshold that reflects the size of the company and an extension to small businesses and professions, including doctors, architects, lawyers and accountants.
Overall, Ms Albanel’s plans were seen as the first step in reforming the market, with dealers acknowledging that much more needs to be done. “We have been shown the first step, but not the staircase,” said Patrick Bongers, president of France’s art dealers’ association. The trade must now wait to see how many of Ms Albanel’s proposals are adopted into law. “The announcements are positive in their clarity and simplicity,” said Guillaume Cerutti, president of Sotheby’s France. “It’s just a case of when they’ll be applied.”
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