Roberto M. Cagnazzo
by Roberto M. Cagnazzo
Roberto M. Cagnazzo, Founder and Partner, is a Chartered Accountant and Statutory Auditor with a considerable experience in domestic and international taxation acquired as Head of Tax in some of the leading Italian multinational groups and as Professor of Comparative Tax Systems and of Tax Law at the University of Turin. Contact Roberto.
Italy does not have a specific regulation for the tax treatment of the sale of artworks, and disputes with the tax authorities often arise regarding the relevance of the disposal and the identification of the correct income category.
A prior distinction must be made between:
The sale of artworks by an art dealer on a professional and non-occasional basis, regardless of the existence of an organisation, generates business income (even if it is a single disposal with considerable economic significance and with the performance of several prodromal activities).
The sale of artworks by a collector who purchases artworks to satisfy their personal need for aesthetic gratification and not for profit, if isolated, sporadic, and not consequent to an activity of “valorisation” of the artwork (e.g. publicising in catalogues, showing in exhibitions, etc.), is considered a simple asset disposal of personal property that is not taxable.
The sale of artworks by an occasional speculator who decides to buy and sell an artwork to make a profit on an episodic basis as a form of self-financing for their hobby can result in a capital gain as a non-habitual business activity, which is evaluated on a case-by-case basis.
The distinction is made on a case-by-case approach that considers the ways in which the selling activity is carried out, and the transferor's motivation. Indicators of a commercial activity include, among others: a large number of actions carried out to finalise the sale a series of acts to increase the value of the work, the value of the bargain, a short time of possession before resale, and the origin of the financial means used. On the other hand, the bulk sale of a collection, the origin by inheritance/donation, and a prolonged time of possession of the artworks demonstration an income irrelevance.
GGI member firm Three & Partners Turin, Italy T: +39 011 5808352
Accounting, Tax, Law Firm Services, Corporate Finance
Three & Partners is a boutique based in Turin and deep-rooted in the North West of Italy but with a clear European identity and a strong international vocation. The firm provides integrated tax, corporate, legal and business advice and assistance all over Italy on a wide range of domestic, European and international matters.