The French art market is now at a turning point

The French art market is now at a turning point. Long behind the United Kingdom and the United States, which are respectively 46 and 27 of the amount of transactions on the world art market, France (6) is now also be preempted by the China. The gap is due mainly to the fact that the greatest works of art, those auctions may exceed 5 or 10 million EUR, Exchange only rarely in Paris. Several explanations for this erosion: the respective powers of the financial markets, the number and nationality of collectors, the size of the galleries and homes for sale... but also the existence in France inadequate regulations and an unfavourable taxation. On these last two points, the Government's action is possible.

To the regulations governing their activity, the French auction companies claim to be placed on an equal footing with their international counterparts. It must end with a status and inadequate legal constraints, which prevent including our homes to offer their customers the price guarantee or to organize private sales, while these devices are regularly performed in London and New York for the works of great value.

On these points, the Minister of Culture announced recently that the Government intended to change our law. It is important now to go quickly, by filing a Bill to make these changes even in regard to an order. Interdepartmental decisions have been made, a consensus exists between the major professional families, and legal changes to operate are identified and simple to prepare: then do not wait! A rapid harmonisation of our legislation with that in force in the other major countries would be a first very positive signal.

Taxing issues are more complex and the transformations may not be as immediate, as the French Government must deal with its European partners. Two issues deserve attention: the resale right and the import VAT. Droit de suite is a collection made on the amount of transactions carried out by the galleries and auction houses. This device does not exist outside the European Union, where it was generalized in 2001. In France, it benefits the artists and, for a period of seventy years after their death, their heirs. Cleverly, the United Kingdom has negotiated an advantageous departure: in this country, the resale right is for the moment due to living artists.

In the import VAT, it strikes the works, from the rest of the world, sold in Europe: it is a tax at reduced rates (5.5 in France), except for manuscripts, decorative objects of less than one hundred years and jewellery which are taxed at the normal rate (19.6), which has the effect to divert these objects sales to the United States and the Switzerland. In these areas, the Government has not yet really exposed action plan. Yet it seems to me that the alignment on the British departure and its sustainability, and the application of a reduced rate of import VAT on all cultural assets, would be reasonable and accessible targets. Similarly, the suggestion of the Committee of art galleries, which proposes to calculate the right on on the realized margin on each transaction, and not on its total amount, is common sense. The French Presidency of the European Union is the appointment not to be missed to convince our neighbours of the usefulness of these proposals. Many of them, including the United Kingdom, should be receptive to our efforts and relay them.

By first encouraging announcements, the Government laid the foundations for a revival of our art market. It is now to implement without delay its intentions and to help the market of French art back in the race.