The Commission has officially asked Germany to change its VAT rules on the application of a reduced VAT rate to the supply of works of art and collectors’ items. In Germany, a reduced rate of VAT is applied to all supplies of works of art and collectors’ items, as well as the letting of such goods. However, the Commission contends that the standard rate must be applied on the supply of works of art and collectors’ pieces within the EU.

Under EU VAT rules there is a list of goods and services that Member States are allowed to apply a reduced VAT rate to. However, that list does not include the supplies of works of art and collectors’ items or the letting of such goods. According to the Commission, EU legislation on reduced VAT rates must be strictly interpreted and applied in order to avoid competitive distortions within Member States and between Member States.

The Commission's request takes the form of a reasoned opinion (second step of EU infringement proceedings). If the rules are not brought into compliance within two months, the Commission may refer the matter to the European Court of Justice.