Art and European VAT

Under the Sixth Directive, Member States may apply a reduced rate of VAT to works of art which are imported, or supplied by their creator. That tax incentive is very important for artists because they sell a major part of their work to customers who are not entitled to deduct input tax. In this article, the author examines some of the problems caused by the present definition of works of art and offers suggestions as to how that definition and its practical application could be improved.