British art market warns against EU levy
LONDON (Reuters) - British auction houses fear that an EU levy on works of art by the likes of Pablo Picasso and Henri Matisse, due to be introduced in 2012, could undermine their position as world leaders in the field.
The British government has a temporary exemption from the EU's "droit de suite" levy on the re-sale price of works of art payable to the artist or the artist's inheritors for 70 years after his or her death.
Extending the artists' resale right beyond living artists to those who have died in the last 70 years would increase the number of sales liable to the levy by four times, according to estimates from the British Art Market Federation.
Considering nearly 40 percent of the 7.7 billion pound annual British art market is accounted for by modern and contemporary art, the levy would "irreparably damage" the sector, the federation added.
"Art dealers and auctioneers in Switzerland, New York and Hong Kong must be rubbing their hands with glee at the prospect of the London art market having one hand tied behind its back after January 2012," said federation chairman Anthony Browne.
Britain is second only to the United States in the international art market, accounting for 29 percent of global sales. Last year the sector generated 7.7 billion pounds ($11.50 billion) and 911 million pounds in tax revenues.
The United States is the world's biggest art market, but of particular concern to British dealers is the rapid growth of the art market in China, which could take much of the business lost to London should the levy be imposed.
"The strength of global competition is demonstrated by the rapid rise of China, which has come from nowhere to be the third largest art market with a 14 percent global share within a decade," the federation said.
It added that the EU had so far failed to enter into negotiations on how to amend the levy globally, thereby creating equal conditions for all. Continued...