Art market

Belgian statistics reinforce British fears that EC policies will drive out the art trade

“VAT and droit de suite have destroyed the nation’s art market”

“In 1970, Belgium was sixth in the international art market in terms of turnover. Now the country is unplaced”, mourns Jacques Garnier, president of the Belgian Chambre des Salles de Ventes (association of auction houses), who is from Bruges.

What is the cause? In his opinion the droit de suite, 4% in Belgium, is at the root of the problem, and even more damagingly, VAT which, since 1996, has been 20% on the margin of profit (6% of the total price before that). “Between 1987 and 1994, national and international salerooms sold 31,111 Belgian paintings for a total of BFr4.711 billion. Ninety percent of the lots sold were auctioned in Great Britain, Holland or Switzerland, countries where droit de suite does not exist and where therefore the taxes are lower.”

Jacques Garnier also notes that, “Until three years ago, 25% of the late nineteenth- and early twentieth-century objects were sold in the US or in other countries of Europe. In 1997, this had risen to 48% in the US, and only 52% in Europe. The combination of VAT and droit de suite encourages the movement of art sales towards the US. Once the market is lost it is almost impossible to recover it.”

This bears out the contention by the British Art Market Federation (BAMF) that VAT and droit de suite would have a similarly disastrous effect on London, Europe’s only international art market (The Art Newspaper No. 76, December 1997, p. 48). In December, its chairman, Anthony Browne, said, “The external threats now facing the art market are quite unprecedented. There is no doubt that such measures will drive London’s unique art market overseas, principally to New York”.

Originally appeared in The Art Newspaper as “VAT and droit de suite have destroyed the nation’s art market”

Appeared in The Art Newspaper Archive, 78 February 1998