The recent reduction of VAT on transactions from 22% to 5% has been welcomed by industry professionals. It is a long-awaited measure that could reinvigorate a market which, in Italy, has experienced glorious seasons but also decades of decline. Yet, support from diagnostics is also needed.
The Golden Age: When Italy Was the Capital of the Antiques Market
For much of the twentieth century, Italy stood at the very center of the international art and antiques trade.
The Florence Biennale of Antiques, founded in 1959, turned the city into a global showcase. During the 1960s and 1970s, major museums such as the Metropolitan in New York and the Getty in Los Angeles made some of their most important acquisitions there. TEFAF, now the leading global fair, came much later. Back then, collectors in search of quality came to Florence.
At the same time, Finarte auctions in Milan, launched in the 1960s, introduced a modern model of public sale. The 1980s saw record-breaking results, such as the sale of an 18th-century Roman chest of drawers for more than a billion lire.
In those years, art was not only passion: it was seen as a safe investment, a store of value against inflation and economic uncertainty.
From Decline to an Exodus Abroad
In the 1990s and 2000s, the Italian market steadily lost ground, while other international hubs gained momentum.
Among the key reasons were restrictive export laws—notably the Bottai Law of 1939, later codified in the Cultural Heritage Code (Legislative Decree 42/2004)—which imposed heavy limits on the free circulation of art. Add to that one of the highest VAT rates in Europe (22%), and Italian works became far less competitive than those sold abroad.
As a result, many dealers shifted their business to Switzerland, Luxembourg, or the UK, setting up offices or relocating sales to more favorable markets.
The issue with Italian export controls is not only their rigidity but also their unpredictability. Decisions are often inconsistent, procedures lengthy and opaque, outcomes uncertain. The result is more frustration than effective protection—driving collectors toward more predictable markets like London or Paris.
5% VAT: A New Beginning?
With the approval of Article 9 of the Omnibus Decree, which transposes a European directive, VAT on the sale and import of artworks in Italy will fall from 22% to 5%—the lowest in Europe. France lowered its rate to 5.5% at the end of 2023, and Germany to 7% starting January 2025.
This long-awaited measure brings Italy closer to its European peers and has the potential to reshape the market.
The expected ripple effects include:
- Repatriation of artworks and renewed appeal for foreign investors.
- Stronger incentives for collectors to complete transactions in Italy, boosting transparency and traceability.
- Improved margins for dealers, at a time of rising fixed costs.
- A surge in demand for specialist services tied to sales: appraisals, condition reports, pre-sale diagnostics, authentication, and conservation.
Scientific Diagnostics: Building Trust
Yet, tax reform alone will not be enough. Transparent processes and certainty in transactions are equally crucial.
TEFAF grew into the world’s leading fair largely thanks to its strict vetting procedures and its commitment to scientific examination of works—practices that built trust between buyers and sellers worldwide.
This is where scientific diagnostics becomes indispensable for Italy’s market revival.
- It brings transparency and objectivity to questions of condition and authenticity.
- It minimizes disputes, speeds up approval processes, and reinforces trust on both sides of a transaction.
- Above all, it ensures that beauty is matched with certainty—an essential condition in today’s art world.
The reduction of VAT to 5% is a historic step, one that could restore Italy’s competitiveness. But without streamlined export procedures, clarity on how the new regime will apply (especially for auctions), and the systematic use of scientific diagnostics, it risks being only a partial victory.
