Value-Added Tax (VAT) for Buy Now and Make Offer and Applicable Auctions (EU and UK)

This article answers commonly asked questions about VAT for Buy Now and Make Offer for UK/EU sellers.

How is European VAT calculated?
Artsy does not calculate VAT. Galleries are responsible for listing prices on Artsy as VAT inclusive. 

What if I don’t have a VAT registration number?
European and U.K galleries without a VAT registration number are not able to use Buy Now or Make Offer at this time. Once you apply for and get a valid VAT registration number, be sure to add it to CMS. 

I’m getting an error message when entering my VAT number. What’s wrong?
You may get an error if your VAT registration number is invalid for cross-border transactions. A VAT valid for cross-border transactions is required to use Buy Now and Make Offer. This is because Artsy has collectors located all over the world, and our system doesn’t prevent collectors in specific locations from purchasing works from you. To obtain an international VAT number, your existing VAT number needs to be validated through the VAT Information Exchange System. See this resource for further information.

What do the new EU VAT laws mean for my ability to sell via Buy Now/Make Offer on Artsy?
Since July 2021, for transactions over €150 (or £135), sellers are now required to charge VAT based on the collector’s location regardless of a seller’s total sales into that country. However, sellers with total international sales (i.e., for one EU jurisdiction to other jurisdictions in the EU) no greater than €10,000 in each of the last two years can continue to charge the local VAT rate of the EU country where shipment originates. The seller is then responsible for charging and remitting VAT.

These regulations also provide a way to streamline the process of remitting VAT. You can contact your tax advisor to understand how to take advantage of this new remittance process.

If the collector is not in the EU (including if they are in the UK for transactions on or after 1 January 2021, when the UK formally left the EU), EU sellers will not be required to charge VAT, because the sales will be classified as export transactions. However, it will still be necessary to consider the jurisdiction of the collector to the extent that jurisdiction operates a VAT regime. For example, if the collector is located in the UK, the sale will count as an import, where typically 5% VAT will have to be paid in order for the international shipper to clear customs. Similar considerations apply in Switzerland, which has its own VAT system and an import rate of 7.7% (as of November 2021). In all cases where the non-EU collector’s jurisdiction operates a VAT regime, the EU sellers should obtain up-to-date local advice regarding applicable rates and/or exemptions that may apply.

Will Artsy collect and remit VAT on my sales?

Artsy is required to collect and remit VAT for transactions up to €150 for EU collectors (or £135 for UK collectors). Artsy is currently working on a solution to collect and remit VAT on works that fall under this threshold. In the meantime, please continue to list any work with a value under €150 (or £135) inclusive of VAT.

How should I list works when using Buy Now or Make Offer going forward? 

You should continue to list these works inclusive of VAT. You may choose the maximum EU VAT rate, or the average VAT rate that you expect will apply. Artsy will charge the collector the price listed inclusive of VAT and remit the sale price to you, less Artsy’s fee. 

You may also choose to list your work via Make Offer, with the maximum VAT rate applied. You can then offer an appropriate discount based on the collector’s location.

If I use an average VAT rate, won’t I be overcharging VAT  in some instances and undercharging in others?

Yes, that is possible. When using Buy Now, you will not be able to change the list price of a work after someone has placed an order on the work. When using Make Offer or Make Offer in Inquiry, you may ask the collector their location and provide an appropriate discount based on applicable VAT. Please note that you will not be able to increase the price above the list price.

If you have any concerns about what this means for your business, you can speak to your tax advisor.

Will Artsy create an invoice for me on Buy Now, Make Offer sales?

Yes, Artsy can create an official VAT compliant invoice for each sale via Buy Now and Make Offer. To request a VAT compliant invoice, reach out to your Artsy account executive.

Will U.S. sales tax be applied to works shipped into the U.S. from non-U.S. locations?
Yes. Artsy will collect and remit applicable sales and use taxes on all works shipped to U.S. states that have marketplace facilitator laws. Find more information in the Sales Tax for Buy Now and Make Offer (U.S.) Article.

I’m a gallery located outside the U.S. Why does Artsy charge taxes on works I ship to the U.S.? I thought the U.S. does not charge customs on art?

While it is true that there are no U.S. customs on art imported from other countries, most individual states apply state tax to art purchases shipped into the state. The relatively new marketplace facilitator laws require platforms like Artsy to collect and remit this tax. Prior to the marketplace facilitator laws, it would have been the responsibility of the buyer to calculate and remit applicable sales tax, which is why your gallery likely was never impacted by state taxes.

I can view the applicable state sales tax in my order. Does this mean that Artsy is passing on the sales tax to me?

For purchases shipping to the U.S., no, it does not. Artsy collects taxes directly from the buyer and remits to the relevant tax authority.

I’m already listing my works inclusive of VAT. Is there an issue that U.S. buyers will be paying both VAT and tax?

You have a few options to approach this. First, we are working on a VAT solution for European galleries that will allow you to list works exclusive of VAT. Until then, we find that most sellers list their works inclusive of an average VAT they expect to incur on their sales on Artsy. Alternatively, you can choose to list your works via Make Offer, inclusive of the highest VAT you expect to incur. Based on the buyer’s location, you can then offer a discount equal to the VAT. 

We find that most galleries prefer the second option, as it allows them to keep prices more competitive, but you’ll need to choose which option works best for your business. We continue to see an average distance between buyer and seller of over 5,000 kilometers, which indicates that international demand for European galleries remains healthy.