VAT on modern art as EU says works are 'light fittings'
Works by the late sculptor Dan Flavin have been classified as light fixtures rather than art – meaning galleries face substantial tax bills for importing them.
European Commission officials claim pieces by the American artist – who is famous for installations using fluorescent strip lights – are liable for full VAT because they are no more than “lighting fittings”.
It means that any museum or gallery bringing his works into the country from outside the EU will have to pay a full VAT levy, which is due to rise to 20pc on Jan 1.
The ruling will also affect the works of Bill Viola, a US artist whose slow motion video pieces won acclaim when they were exhibited at the National Gallery in London.
It is likely to reignite age-old the debate over what does and does not constitute art.
The decision follows a legal battle by London’s Haunch of Venison art gallery, which was ordered to pay a £36,000 VAT bill by British tax authorities for importing components for pieces by both artists in 2006.
As sculptures, the pieces would be subject to only 5pc VAT.
The gallery won on appeal to the VAT and duties tribunal, but the decision has now been overruled by the European Commission.
In its ruling, the court said Flavin’s work has “the characteristics of lighting fittings … and is therefore to be classified … as wall lighting fittings".
Both artists are now represented by Blain southern, a new gallery set up this year by the original founders of Haunch of Venison.
A spokesman for the gallery said the partners are now taking advice from trade bodies including the Society of London Art Dealers.
Pierre Valentin, the lawyer who challenged the original customs ruling on behalf of the Haunch of Venison, told the Art Newspaper: "To suggest, for example, that a work by Dan Flavin is a work of art only when it is switched on, is comical.
"One is entitled to ask if the commission has made a judicious use of its powers when overruling these judicial decisions. The reasons given in the regulation in support of the classification are absurd, and the regulation conflicts with the jurisprudence of the European court of justice."
St Paul's cathedral could be among the first victims of the ruling. It has commissioned two altar pieces from Viola, due to be unveiled next year, which could become more expensive due to the VAT levy.