Art fair aqusitions and VAT

As usual, with Art Basel Miami Beach going to its end, many clients ask, if and how much import tax for their aquisitions will apply, if bringing them back to Europe. Some of them were promised by the selling gallery that no import tax will be due at all, as the purchased art work "originally comes from the EU and can be reimported free of any import charges". 
Unfortunately,  I very often have to disappoint them with my answer.

Let me shortly explain how it works and why doesn't it work the way clients expect it.

Here some general rules for invoicing the VAT between the EU countries (applies to VAT payers of course):

1) a sale within the EU is in customs' terms not an export. It is subject to VAT!

2) if the buyer is another EU-VAT payer, like another gallery, the invoice may be issued net and the transaction has to be declared in the so called quarterly recapitulative statement. Sounds terrible, I know :) but means just that the finance authorities in the buyer's country are informed about this purchase and that this purchase will be taxed in the buyer's country of tax residence, with the local VAT rate.

3) if the buyer is a private person, like an art collector, the ivoice should be issued with VAT, according to the rate valid in the seller' country.

4) regardless of the purchaser being a private person or a company, if a sale between an EU seller and an EU buyer takes place at a fair held outside the EU (like all editions of Art Basel), the acquired art works are seen by the customs as third-country goods and are as such subject to import VAT upon return. Taxation cannot be legally avoided that way! 

The advantage of  fair aquisitions is the import VAT rate that is usually much lower than of the regular sales VAT. In Germany it is 19% and 7%, so the difference may be considerable. Still, please note, that faking fair sales to lower the VAT amount payable by your client is encouragement / contribution to tax evasion and as such not quite legal :)

As for the famous "tax-free reimportation", it is commonly practised indeed but possible mostly for the actual owner/exporter of the art works or in cases, in which a non-commercial character of such imports is proven and comprehensible for authorities (like a temporary travelling exhibition).

Of course there are may cases in which a tax free reimport by the buyer "somehow" worked, mostly due to negligence of individual customs officers...but still - it was definitely not correct :) Generally, the customs check reimport docs much much more thorough than all other ones, as they are well aware of tax fraud practises.

Wish you luck with your return shipments and I'm warming up for all the "charming" Miami imports and reimports awaiting me very soon :)