Artprice : Wealth Tax (ISF) on Artworks...Barking up the Wrong Tree

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Oct 16, 2012, 08:55 ET

PARIS, October 16, 2012 /PRNewswire/ --

The last week has seen a quasi-unanimous outcry from all segments of the French art sector expressing discontent regarding the application of France's Wealth Tax (Impôt sur la Fortune, ISF) to artworks valued at more than 50,000 euros, as announced during the interval between Frieze London, which has just closed, and the FIAC Paris, which opens its doors tomorrow.

History repeating? In effect, this "great debate" has taken place under all the different French governments for nearly 20 years: a genuine républicain ritual trotted out in clockwork fashion; and which Artprice has been following since it was first mooted.

As Thierry Ehrmann, Chairman and founder of Artprice, has said in today's Libération (16 October 2012), you only have to look at the reaction of Artprice's 126,000 clients resident in France (Artprice has 1.71 million clients worldwide^[1]).

Indeed, as soon as rumours of a partial application of the ISF to certain artworks emerged, Artprice, as thierry Ehrmann explains today in Libération, noticed a major increase of info requests on its servers compared to the same period of 2011.

After analysis of our payment requests sent out to the originators of these requests, we realised that they represent an entirely new segment of new French Artprice customers about whom we know very little. In fact, looking at their data requests and the types of subscriptions selected, we realised that these are people who are light-years away from the professional art market. These people have no intimate knowledge of art values, and, panicked by the ISF, have suddenly started to seek information from Artprice's database in order to discover the value of their family artworks, which, it may be assumed, they would very much prefer not to sell. But faced with the threat of the ISF, family traditions are being lost through smartly catalogued sales in London and New York or on Internet via Artprice.

This sad story is interesting because we are not talking about hundreds of people, but rather thousands of new accounts, and hence it is indicative of a major problem.

The moral of the story is very simple and takes only a few lines to describe: the Art Market is the oldest market in the world and has been without frontiers since long before "globalisation" began (Artprice exports its data via the Internet to 72 countries throughout the world).

The French political class, both on the left and the right, is making a terrible confusion between France, which is arguably the world's primary cultural destination in the world for its heritage, monuments and national museums, and the French art market, which is the laggard of the major countries of the global art market. In terms of statistics, just three lines suffice to illustrate this:

China's share of the global art market will probably increase from 41.4% in 2011 to around 46/48% in 2012. The United States will have around 22% compared to 23.6% in 2011 and the UK will probably post around 18% (versus 19.4% in 2011). Meanwhile... France's global market share will certainly contract from its 2011 level of just 4.5% (Source: Art Market Artprice 2011 free online at http://imgpublic.artprice.com/pdf/trends2011_fr.pdf).

For further detailed information, please consult Artprice's Contemporary Art Market Report that we recently presented at Frieze London. This report clearly states that the French public art market represents just 18 million euros over a full year (excluding private sales) which, to put it bluntly, means that France is almost non-existent on the global Contemporary art scene.

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1. Artprice's reference document registered with the AMF (Autorité de Marchés Financiers)

Only 1% of Contemporary lots sold via French public auctions fetch more than 50,000 euros.

If we look at the French art market as a whole, one simple but cruel figure says it all: a good one-day sale in New York or London generates the equivalent of France's entire fine art auction revenue in one year!

The PDF version of our annual Artprice Contemporary Art Market Report is downloadable on Artprice.com in French and English. The German, Italian, Spanish and Chinese versions will follow in a few days. Download it now free on Artprice at http://imgpublic.artprice.com/pdf/artprice-contemporary-2011-2012-fr.pdf

Artprice is the global leader in databank on Artprices and indices with more than 27 million indices and auction results covering more than 500,000 artists. Artprice Images® offers unlimited access to the largest Art Market resource in the world, a library of 108 million images or engravings of artworks from 1700 to the present day along with comments by Artprice's art historians. Artprice permanently enriches its databanks with information from 4,500 international auction houses and auctioneers and publishes a constant flow of art market trends for the main news agencies and 6,300 international written media. For its 1.71 million members (member log in), Artprice posts standardized adverts in what is today the world's leading Standardised Marketplace® for buying and selling works of art by private contract or at auctions -regulated by French law alinéas 2 et 3 de l'article L 321.3 du code du commerce- (source Artprice).

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SOURCE Artprice.com