Tax classes: what each work is for VAT
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A work's tax class says what it is in the eyes of tax law — an original artwork, a screenprint, a photograph, a print, a book, merchandise. With tax assistance turned on, it decides the work's VAT rate. WrkLst suggests a class for every work; you confirm it where it matters, for one work or for many at once. This article describes WrkLst 10.
Why it matters
The same price can carry different VAT depending on what the work is. In Germany an original painting, drawing, hand-pulled print or sculpture is taxed at 7 %, while a screenprint, an artist's photograph, a print or a poster is taxed at 19 %; books and catalogues are back at 7 %. In the UK books are zero-rated, and whether a work counts as a work of art, an antique or a collector's piece decides where the margin scheme can be used. In the US the class rarely changes the sales tax on art, so a business based only in the US is not asked for it.
Tax classes come with tax assistance; see Tax assistance: VAT and sales tax suggested on every sale.
The classes
- Original artwork (painting, drawing, hand-pulled print, sculpture) — made entirely by the artist's hand: paintings, drawings, pastels and collages; prints pulled by hand from plates or blocks, such as etchings, woodcuts and lithographs; original sculpture and up to 8 casts. In Germany 7 %.
- Screenprint — an artistic screenprint, signed and numbered or not. In Germany always the full rate of 19 %.
- Artist's photograph (signed, edition of up to 30) — a photograph printed by the artist or under their supervision, signed, unique or in an edition of up to 30. In Germany 19 %.
- Other artistic work (tapestry, ceramics, enamel) — a hand-woven tapestry, a signed unique ceramic, or an enamel on copper (up to 8). In Germany 19 %.
- Collector's piece — of historical or scientific interest, historic photographs included. In Germany 7 %.
- Antique (over 100 years old) — in Germany 19 %.
- Print or reproduction (poster, offset, giclée) — a poster, a reproduction, an offset, giclée or digital print, a postcard. In Germany 19 %.
- Book or catalogue — a book, or an exhibition catalogue in book form. In Germany 7 %, in the UK 0 %.
- E-book — an electronic book.
- Merchandise and other goods — merchandise and everything else you can hold, such as a tote bag. In Germany 19 %.
- Clothing — clothing and shoes, such as a t-shirt.
- Hiring out a work.
- Service (installation, framing, consulting) — installation, framing as a service, advice, a commission or a loan fee. Where a service is taxed depends on who buys it and where it is performed.
Suggested, or confirmed
WrkLst suggests a class from the work's type. A painting or a sculpture that is not part of an edition counts as Original artwork (painting, drawing, hand-pulled print, sculpture) without asking. Every other work — any edition, a work on paper, a photograph, a video, an installation, mixed media, a type of your own — gets the likeliest class as a suggestion: Artist's photograph (signed, edition of up to 30) for photography, Print or reproduction (poster, offset, giclée) for editions on paper, Merchandise and other goods for the rest.
A suggestion holds nothing up as long as every class it could be gives the same rate. Where another class would give a different rate — a work on paper that could be an etching at 7 % or a print at 19 %, say — the sale's Tax section asks you to confirm the class before its invoice can be issued, and your website does not sell the work online until the class is confirmed.
Many works at once
Settings › Tax › Works that need a tax class groups every work whose class is only a suggestion by type and edition — Photography, editions · 24 works · 3 for sale on your website · suggested: Artist's photograph (signed, edition of up to 30). Choose the class and Set for these 24 works, or choose Always for Photography editions to make it a rule that also answers the works still to come. Your rules lists them, each with a bin to remove it. Below, Products in your shop lists the products of your own website shop with the rate they were charged at so far — Charged so far: 7% — so you can choose each one's class — or choose it on the product itself, see Website settings: hosting, look, enquiries and legal pages. Before tax assistance can be turned on, every work and product for sale on your website needs its class.
To set the class of a selection of works, put them in the basket and choose Edit works → Multi-edit: its Tax section offers Tax class and Sold as, and for a business in Singapore Customs status (Singapore). See Editing and Multi-Editing.
On a work
Open the work and choose Edit. The Tax section — What this work is for VAT, and how you acquired it — shows the Tax class, with the legal test of the chosen class as its help. While nothing is chosen it reads, for example, Not chosen: suggested Print or reproduction (poster, offset, giclée); choosing a class confirms it. Sold as decides between Regular VAT and the Margin scheme for this work, or follows your account with As set for the account. For a business in Singapore, Customs status (Singapore) — only for works kept in a Free Trade Zone or Zero-GST warehouse — says whether the work Came from abroad, import GST not paid, or has Import GST paid, or bought or made in Singapore; see Works under customs control.
The section is there for people whose role includes Accounting (GoBD invoicing, DATEV export), once tax assistance is being set up or is on for a business outside the US.
Editions
An edition's class is set once, on the edition's first work, and every copy follows it: Every copy of this edition follows this class unless a copy sets its own. A copy names the work it follows; choose a class on a copy only where that copy is different. See Create and Manage Editions.
The margin scheme: where a work came from
Under the margin scheme you pay VAT only on your margin — the price minus what you paid — and the invoice shows none. Whether a work qualifies depends on how you acquired it, so the Tax section asks under How you acquired it:
- Who you acquired it from — A private person, The artist or their heirs, without a VAT number, The artist or their heirs, with a VAT number, A dealer selling under the margin scheme, A business that charged VAT, We imported it ourselves, Consigned to us, sold in our name or Consigned to us, sold for the consignor. Until you choose, WrkLst works it out from the consignment or from the contact the work was acquired from, and shows what it found.
- Where it was when you acquired it — a work you brought into the country yourself counts as an import, whoever sold it to you.
- For a consigned work, The consignor is — taken from the consignment's contact — and, for a UK business, Your commission (UK): Deducted from the payout or Invoiced to the consignor.
- VAT the seller charged — in Austria it also decides whether a gallery that is no reseller charges 13 % — and, for your own imports, the Customs value and the Import VAT paid from the import papers. These amounts are shown to people who may see a work's values.
What you paid is the work's Acquisition price under Acquisition. In Germany the margin scheme is open to works bought from private sellers, from artists without a VAT number and from dealers who sell under the margin scheme, and to consigned works whose consignor is one of these — not to works bought from a VAT-registered artist or from a business that charged VAT. In the UK the class counts as well: works of art, antiques and collector's pieces you imported yourself, and works of art bought from a VAT-registered artist, qualify only if you told HMRC you use that option, which Settings › Tax asks. In Austria the same details decide whether a gallery that is no reseller charges 13 % on an original — see A gallery that is no reseller. In Singapore the Gross Margin Scheme takes only works bought in Singapore from private sellers or from dealers who sold them under the scheme — see The Gross Margin Scheme. When something the margin scheme needs is missing — the purchase price, say — the sale's Tax section tells you what to enter on the work.
A work Consigned to us, sold for the consignor is not your own sale: the buyer's invoice is the consignor's, and your sale is your commission, billed to the consignor as a line of its own.