Paris, 1 June 2011, Art Media Agency (AMA).
The French Solidarity Tax on Wealth (Impôt de Solidarité sur la Fortune)is an annual direct wealth tax on citizens whose assets are worth more than a certain amount. Artworks, however, are not taken into account. This means that buying art effectively leads to tax optimization for the taxpayer and makes the art market as a whole more dynamic. Extending this tax to include artworks could have a negative effect on the art market and artistic creation.
On 1 June 2011, the French finance commission met to discuss budgetary reforms concerning the Solidarity Tax and adopted an amendment allowing artworks to be taken into account when calculating the tax. This amendment was proposed by an MP from the UMP (Union for Popular Movement – the centre-right political party of which French president Nicolas Sarkozy is the leader). Marc Le Fur’s proposition has not been welcomed by the French government, which wishes to reform the Solidarity Tax by revising its rates and threshold, but not by changing the tax base.
It is thus unlikely that the amendment adopted by the financial commission will be passed by the French Senate or National Assembly. Similar amendments were proposed when Lionel Jospin was Prime Minister, but as all the conservative MP’s voted against the bill, it was not passed.
MP’s who are supporting the amendment state that the current exclusion of artworks from the Solidarity Tax benefits only rich collectors. However, the reform is likely to have a negative effect on artists, gallery owners, auction houses and all those involved in the art market.
It is now up to the MP’s to decide whether or not the Solidarity Tax base should be increased.