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What is Art?

TAX LAW ON THE LOOKOUT FOR ANSWERS.

THE AUSTRIAN SALES TAX LAX FAVOURS THE SALES OF ARTISTS AS WELL AS THE SALES OF OBJECTS OF ART. CONVERSELY, THE CONCEPTS OF ‘ART’ AND ‘ARTISTS’ ARE INSUFFICIENTLY REGULATED.

The sales tax is a tran­sac­tion tax and encom­pas­ses all per­for­man­ces and rela­ted ser­vices which an entre­pre­neur car­ri­es out natio­nal­ly for a fee; the regu­lar tax rate is 20% and cau­ses, basi­cal­ly, a rise of the sale pri­ce for cli­ents. To deve­lop ‘art’ and ‘cul­tu­re’, the tax rate for the sales of an artist as well as the sales from the tra­de with art objects is redu­ced to 13%. The gross purcha­se pri­ce paid by the purcha­ser is redu­ced with the aim of boos­ting demand at the expen­se of tax revenues.

For the con­cepts of ‘art‘ and ‘artist’, tax law only par­ti­al­ly iden­ti­fies the cor­rect definitions. 

Based on the per­ti­nent ruling by the Supre­me Courts, an entre­pre­neur, seen from a fis­cal point of view, is to be con­si­de­red an artist when he deve­lo­ps a per­so­nal and crea­ti­ve acti­vi­ty in an exten­si­ve area of art due to his artis­tic talent and doesn’t limit hims­elf to repli­ca­ting what can be learnt or he hims­elf has learnt. This implies acti­vi­ties whe­re his indi­vi­du­al view and for­ce of crea­ti­on reflect each other and reach an artis­tic crea­ti­ve apex; this isn’t the case if the entre­pre­neur plucks shapes and pat­terns from a com­mon reper­toire of ide­as, uses well­known role models or if he’s so limi­ted by the wis­hes of the cli­ent who com­mis­sio­ned him that he can no lon­ger deve­lop his skills. Based on the­se gene­ral princi­ples from the legis­la­tu­re, the only thing left to deci­de is if we’re dealing with an artist or if an object was crea­ted by an artist.

The­se rather gene­ral defi­ni­ti­ons of the con­cepts of ‘art’ and ‘artist’ are under­pin­ned by nume­rous Supre­me Court rulings. To shed light on the cur­rent uncer­tain­ty of both acti­vi­ties, the fol­lowing excerp­ts have been selected:

The sui­ta­bi­li­ty of use of an object doesn’t exclu­de that the acti­vi­ty car­ri­ed out to crea­te said object isn’t an artis­tic one; the prac­ti­cal value can­not the­re­fo­re be auto­ma­ti­cal­ly assi­gned to an object as a work of art.

Only the crea­ted work can pro­vi­de infor­ma­ti­on on whe­ther it’s a work of art or not; when asses­sing the artis­tic value of the object, ele­ments such as the city and venue of the artist’s trai­ning, copy­right of the work, mem­bers­hip in a tra­de asso­cia­ti­on of artists in trai­ning or an offi­cial docu­ment from the rele­vant Federal Office respon­si­ble for cul­tu­re and art for the means of legal social insuran­ce and other infor­ma­ti­on should be con­si­de­red; howe­ver, what’s decisi­ve is for the Fis­cal Aut­ho­ri­ties to deeply tack­le the tar­ge­ted works.

Asuc­cess­ful­ly com­ple­ted artis­tic trai­ning is only an indi­ca­ti­on of artis­tic acti­vi­ty; even in this case the rele­vant aut­ho­ri­ty has to assess the object crea­ted by the entre­pre­neur minu­te­ly. The aut­ho­ri­ty has to base its exam on a repre­sen­ta­ti­ve cross-sec­tion of the work of an artist.

The fact the work of art is an ori­gi­nal and uni­que pie­ce isn’t enough to make an object into a work of art.

Ulti­mate­ly, the Fis­cal Aut­ho­ri­ty won’t have the necessa­ry exper­ti­se in many instan­ces to assess the cases pre­sen­ted by the legis­la­tu­re. Con­se­quent­ly, the qua­li­fi­ca­ti­on of the entre­pre­neur as an artist or the cate­go­ri­sa­ti­on of a work as a work of art and the resul­ting reco­very of fis­cal advan­ta­ges lies in the assess­ment of experts. If this fact can be united with the princip­le of free­dom of art and sci­ence is a mat­ter which is being ques­tio­ned yet again.

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Written by

Steuerberater, Certified Public Accountant, Universitätslektor, Prüfungskommissär der Kammer der Wirtschaftstreuhänder.

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