A warning light for Dan Flavin and Jenny Holzer

No matter, if by Jenny Holzer, Dan Flavin, Ferdinand Kriwet or Otto Piene – from the custom's point of view, most art works containing light bulbs or neon tubes are considered to be „just lamps”. A similar phenomenon may take place e.g. in case of wool works by Rosemarie Trockel, which happen to be seen as „just carpets”. Let alone ready mades by Duchamp and Warhol.

"But why would that actually matter at all? The authorities are just ignorant, that's it",  one could say. 

Well, in case of an outgoing shipment, where no charges apply for the exporter, it actually doesn't make any difference at all. 

The 'fun' starts while importing :)

There are basically two kinds of import fees in the EU: the import VAT (in Germany 7% or 19%) and customs duties. Both based on what customs tariff number (the so called Harmonized System Code) imported goods are assign to.

Luckily, according to the UNESCO Florence Agreement of 1950, art works are not subject to customs duties at all. 

As for the import VAT, in Germany the lower 7% tax rate applies only to original, unique art works, but e.g. not to photographs or c-prints. All kinds of ready mades, simple compositions made of ordinary objects, audio-video or light installations etc. are likely to be classified not as original art works but as material/components they are made of. As such they become subject to the 19% tax rate and customs duties (if applicable).

That is why the customs tariff classification used for an import clearance may significantly affect your finances.

Let's deal with this issue using the example of neons and works like ones by Otto Piene. I believe every art handling agent would first try to declare them as art unique installations  = art works (HS Code / customs tariff 9703) which makes the most sense.

1. Permanent import
   - If the HS code 9703 is accepted, the importer pays the import VAT of 7% and no customs duties apply.
   - If not – the works have to be declared as „lamps” (one of the 9405 HS codes – e.g. „electric lights and lighting fitings” or „illuminated sign, illuminated nameplates” ) for which the import VAT of 19% and additionally customs duties of 2,7% apply! 

1. Temporary import
   - If the HS code 9703 is accepted, there are no fees or complications at all, provided that the importer is entitled to temporarily import art works free of import tax deposit.
   - If not – the temporary admission (TA) is opened after the customs corrected the 9703 HS Code „sculptures and installations” to 9405 „lamps”. No import tax deposit applies but the potential customs duties have to be deposited on the customs' bank account. Only after the transfer has been received, the shipment can be handed over to the importer. * This does not apply to state institutions whose finances are conrolled by the governemnt anyways.

As you see, a customs tariff /HS Code can make a great difference, if imported works are valuable !!! 
One of my clients, currently preparing a large exhibition of famous light installations has to – surprise surprise – deposit ca. 50.000,00 EUR of potential customs duties. Not amusing at all! 

Below some advice that can hopefully help you to avoid such frustrating situations.

HINTS:

• If you're awaiting a shipment containing art works that can be seen as „ordinary objects”, prior to the arrival (or even better prior to the departure), consult the HS code / customs tariff you're planning to use in the clearance with your agent or with the customs directly. Maybe there are no reasons to worry.
• In case it is highly probable that your Duchamp's „Fountain” will be classified as „household articles and toilet articles, of ceramics other than porcelain” :) I would advise amending the proforma invoice and declaring such an object as e.g. „ A ceramic pissoir, an element of an artistic installation by Marcel Duchamp, material value: 500,00 EUR”. If it is seen as „just a pissoir”, then its value should actually be one of „just a pissoir” as well. No bulbs but the same principle :)
  CAUTION: Of course this can be tried ONLY in case of temporary imports (to avoid the deposit), in case of a purchase it would be a severe tax evasion !!
  Such amendments should of course be done in best case before the shipment departs and surely not as a correction of an already submitted proforma! Worth a try, though as always – the final decision is up to the customer officer in charge!
• If a potentially problematic art work is a part of a larger shipment that you need to receive ASAP, ask your agent to clear it separately. In the time, when you'll be dealing with discussions, amendments, deposit transfers etc. the rest of the works can be cleared and delievered to you.
• You have a right to enter an objection against the customs' decision, classifying an art work as an ordinary object and making you pay or deposit customs duties. In such a case you need to obtain an opinion of an officially recognized expert (usually from the Chamber of Commerce and Industry) – if he or she claims the object an art work, the customs will return your deposit and/or customs fees.

• Even though it makes little sense, to enter an objection against the customs' decision, you actually first have to pay the duties. Especially in case of a temporary admission the customs wouldn't make the TA doc available until your payment has been booked – at the same time, the Chamber of Commerce and Industry requires a copy to deal with your objection and application for an expert opinion.  
  Yes, it is terrible indeed :(

RECAP: Be very careful while shipping light installations and ready mades – they can not only break but also cost you dearly!!