VAT in the arts sector: what will change from 2026?

Since Jan. 1, 2026, the VAT rules for the art sector have changed dramatically. Influenced by amended European regulations, the application of the profit margin scheme is severely restricted. This has important financial and practical consequences for art dealers, galleries and other players in the sector.

To safeguard the competitive position of the Belgian art market, the legislator is simultaneously introducing an important compensatory measure: the reduced VAT rate of 6% will henceforth be more broadly applicable. In this article, we explain the changes and outline what this means concretely for practice.

VAT and art: a complex interplay

The VAT treatment of works of art has been complex for years. The applicable VAT rate depends, among other things, on the capacity of the seller and of how the artwork (artifact, collectible or antique) was acquired.

Until recently, the reduced VAT rate of 6% when sold in a professional context only if the artwork was sold by the artist himself or by its beneficiaries. This applied to local purchases as well as intra-community acquisitions and imports.

When a work of art was sold by a other party, such as an art gallery or dealer, was basically the standard rate of 21% btw applicable. That tariff differential placed art dealers in a less favorable competitive position.

The profit margin scheme as a solution

To mitigate that competitive disadvantage, the legislature provided for the possibility of the so-called margin scheme apply to resales. Under this scheme, the trader does not pay VAT on the entire sales price, but only 21% VAT on profit margin realized (the difference between purchase and sale price).

However, the application of the margin scheme was limited to specific situations. Thus, it could only be applied when the artwork was obtained at the reduced VAT rate and in the following cases:

• Artifacts that the trader himself entered;
• Artifacts provided by the creator or his beneficiaries to the merchant;
• Artifacts provided by a other VAT liable than a reseller when such supply by such other taxpayer is subject to the reduced tariff.

What will change starting in 2026?

Expansion of application of margin scheme

Until now, the European VAT Directive allowed member states the choice to apply the profit margin scheme. Not all member states used it, which led to distortions of competition within the EU. To counter this, the directive was amended.

As of Jan. 1, 2026, the margin scheme may only be applied when the purchase or input of the art object no reduced VAT rate was applied. In practice, this means the elimination of the margin scheme for much of the art trade.

Compensation

In order to prevent the Belgian art sector from losing its attractiveness as a result, the legislator introduced a compensation introduced. Henceforth the reduced VAT rate of 6% applicable to all sales of art objects for which the margin scheme cannot be applied, regardless of the capacity of the seller. Thus, the reduced rate is no longer exclusively reserved for artists and their rights holders.

Some examples

The impact of the new rules varies depending on the situation. A few examples make this clear:

Example 1

• An art gallery purchases a painting from a Belgian artist at 6% VAT.
• On resale in Belgium, the gallery also applies 6% VAT.
• The gallery has no way to apply the profit margin rule to resales.

Example 2

• An art dealer purchases a sculpture from a private individual and prepares a purchase order for it.
• On resale, he can choose:
  • or he sells under the normal VAT regime with 6% VAT on the selling price,
  • or he applies the margin scheme and pays 21% VAT on the profit margin realized.

Example 3

• A Belgian art dealer imports a painting from the United Kingdom and pays 6% VAT upon importation.
• In the case of resale to a French gallery (with transport to France on behalf of the Belgian dealer), the sale is made under the normal VAT regime and may be an exempt intra-Community supply (if the conditions are met).
• The profit margin scheme is excluded here.

Example 4

• A Belgian art gallery purchases a marble sculpture from an Italian dealer.
• The work is transported from Italy to Belgium by order of the merchant. The purchase invoice does not mention a VAT amount, it is an exempt intra-Community delivery on behalf of the Italian seller.
• The purchase should be considered by the Belgian art gallery as a taxed intra-Community acquisition at the rate of 6%.
• The resale of the work will also take place under the normal VAT regime. The VAT on the IC acquisition is therefore deductible.
• The margin scheme cannot be applied to resales.

What about goods in stock?

No transitional arrangement

For art dealers, a significant transition problem may arise with works purchased before Jan. 1, 2026 at 6% VAT with the intention of selling them under the profit margin scheme. In those cases, the VAT on purchase was not deducted.

However, since Jan. 1, 2026, these works must be resold under the normal VAT system. There is no transitional arrangement provided that still allows the application of the margin scheme. The consequence, however, is that the trader will still be entitled to deduct the VAT on these purchases.

Right to VAT deduction

In principle, the right of deduction must be exercised in the VAT declaration of the period in which the purchase took place, and if not, at the latest before the end of the third calendar year following the year in which the VAT became due.

• Specifically, the VAT on purchases through 2023 can still be deducted through a return that is submitted before the end of 2026 (Q3 2026 or November 2026).
• By way of administrative tolerance Moreover, the VAT records accept that the VAT on purchases from 2022 can still be deducted, also no later than the end of 2026.