Commission refers Austria to the Court of Justice of the EU over the VAT treatment of resale rights of works of art

Further information:

Under Austrian law royalty payments to an artist or to those entitled to royalties for the resale of an original work of art, are currently subject to VAT. This violates EU law according to which VAT is only due on goods or services 'provided for consideration', i.e. for payment.

Background information:

The resale right – which gives rise to what are commonly known as 'royalties' – is an unassignable and inalienable property right enjoyed by the author of an original work of graphic or plastic art, to an economic interest in successive sales of the work concerned. This right allows an artist, under certain conditions, to receive a percentage of the sale price of a work of art when it is resold.

In a previous judgement [C-16/93], the Court of Justice of the EU decided that when a person provides services without receiving a direct consideration, there is no basis of assessment or amount on the basis of which the VAT can be applied.

The Commission decided to refer Austria to the CJEU following the country's failure to bring its legislation in line with the EU law. A reasoned opinion had been sent in July 2016.

The European Commission decided on 7 December 2017 to refer Austria to the Court of Justice of the EU for incorrectly applying Value Added Tax (VAT) to royalty payments to artists for the resale of works of art.

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