As of 1st January 2021, the UK is no longer an EU member state. Fortunately, the EU and the UK concluded the Trade and Cooperation Agreement (“TCA”) on 24th December 2020, avoiding the worst-case scenario of a no-deal Brexit. Below are a few clarifications affecting the cross-border movement of art in the post-Brexit era.
Import Duties & VAT
Generally, the UK no longer being an EU member state from 1st January 2021, goods arriving in Great Britain (England, Scotland and Wales) from the EU and vice versa will be subject to import duties and VAT, unless a relief applies.
Nevertheless, where the relevant rules on origin are met, tariff duties will be eliminated for trade between the EU and the UK. Accordingly, importing an artwork which originates from the UK (not merely in transit) to the EU can benefit from preferential duty treatment under the TCA.
The same does not apply to import VAT; unless an exemption applies, import VAT is payable to the country of arrival at a rate determined by the latter (on Greece’s temporary import VAT reduction for artworks click here). To make this clearer, whether one imports an artwork to the UK from any EU member state or non-EU country, import VAT is generally payable at 5% (the UK import VAT rate). Likewise, transporting an artwork from the UK to any EU member state is also subject to import VAT.
UK Returned Goods Relief
One can claim relief to pay less customs duty and VAT if goods that have previously been exported from the UK are re-imported within 3 years from their export. To soften Brexit’s impact, a special extension period has been agreed which allows importers extra time to return goods to Great Britain from the EU. Specifically, provided that the general conditions for the relief are satisfied, goods, including artworks, transported from the UK and which are in the EU on 31st December 2020 will be eligible for relief if they are re-imported into Great Britain on or before 31 December 2021. This shall apply even if the normal 3-year time limit for re-importation has expired.
Owners and traders intending to return their artworks to Great Britain may wish to do so by the end of 2021 in order to benefit from the automatic 3-year rule waiver discussed above.
Export Licenses for Objects of Cultural Interest
When planning for a cross-border movement of artworks and objects of cultural interest, one must still observe the national export licensing requirements and be informed in relation to any bilateral agreements which may impose import restrictions on certain categories of art and collectible items.