Why Are Spain’s Galleries Still Paying 21% in VAT?

Spirits are low among Spanish gallerists ahead of ESTAMPA art fair in Madrid this weekend. For well over a decade, they have operated at a competitive disadvantage, their sales subject to a value-added tax (VAT) of 21 percent, which is three to four times higher than that of neighbouring European countries.

Over the years, there have been protests and strikes against the high rate tax, but galleries have been increasingly vocal this year, after Portugal dropped its cultural VAT from 23 percent to 6 percent in December 2025. As the sector’s appeals remain unanswered, bitter resignation grows.

In 2012, Spain's VAT rates for the arts were raised from 8 to 21 percent in response to the financial crisis. In 2014, the tax rate for artists selling their own work dropped to 10 percent, and more reduced rates were rolled out in 2018 for other cultural industries, like cinema, theatre, publishing and live performances. Not for art galleries.

Then, in 2022, the European Union issued a directive that made it mandatory for its member nations to enforce a reduced VAT scheme for the sale of artworks. Rates for galleries across Europe have since dropped progressively, to 5 percent in Italy, 5.5 percent in France, 7 percent in Germany. Only Spain has failed to comply.

“If I represent an artist and a colleague of mine from Portugal represents them too, and that artist takes photographs, they will be cheaper in Portugal, even if they are identical, from the same edition,” explains Moisés Pérez de Albéniz, director of the eponymous Madrid contemporary art gallery. For him, the issue of the high rate tax is starting to seem intractable: “It’s been years. I’m very angry at the situation, it’s strangling contemporary art.”

A Competitive International Art Market

Despite its competitive disadvantage, Spain has held a stable position in the global art market: according to Art Basel & UBS Art Market Reports, it has ranked 7th in sales since 2017, with roughly 1 percent of the global total. However, with rapidly growing markets like Japan and South Korea rising to a comparable 1 percent share last year, stability can quickly turn into stagnation. “I can appeal to my clients’ sense of responsibility towards Spanish galleries, but I cannot ask them to be stupid,” Pérez de Albéniz says.

Alberto de Juan is the director of Max Estrella, a gallery that represents emerging and established national and international artists, also in Madrid. He believes the government’s inaction stems from the assumption that art is a rich people’s business. “The collector might be rich, but definitely not the artist, the providers or the gallery. We’re not millionaires, and we’re barely making it,” he tells The Art Journal.

Visitors at ARCO Madrid 2026. Courtesy of ARCO Madrid

Max Estrella will be present at ESTAMPA, but the survival of his gallery largely depends on sales to collectors based outside Spain. “Many of these sales we can file as exports and we avoid VAT altogether,” he explains. It’s not an easy solution: the cost of showing at international fairs keeps soaring, but Spanish galleries cannot afford to miss out on international exposure. And even then, it’s difficult to be competitive. “You don’t have to go to New York to buy cheaper, you can just cross the corridor and go to the next booth,” he says.

A Year in Protests

While protests have intensified, the government has stonewalled. In February, the Consortium of Contemporary Galleries in Spain, which represents over 130 galleries in the country, called for a strike against the 21 percent VAT. For one week, over 200 galleries closed their doors in protest. Having received no response by the end of the month, the Consortium urged galleries and artists to occupy the Reina Sofia Museum in Madrid, the Museum of Contemporary Art of Barcelona, the Valencian Institute of Modern Art (IVAM), and the Andalusian Centre of Contemporary Art in Seville (CAAC). The government remained silent.

Then, in March, the 71 Spanish galleries present at the ARCO Madrid art fair turned off their lights for ten minutes and booed Minister of Culture Ernest Urtasun during his tour of the event with the King and Queen of Spain. That same month, the European Commission decided to take Spain to the European Union Court of Justice, seeking economic sanctions for failing to comply with its directive on special VAT schemes.

Another strike was organised in June, and APERTURA Madrid Gallery Weekend (running from 10 to 13 September) opened with an address by Pablo Flórez, president of the Association of Art Galleries of Madrid, appealing to the authorities to recognise the gravity and urgency of the situation. Still, no response.

Mobilisation of gallery owners and artists at the Reina Sofia Museum, 2026. Courtesy of Consortium of Gallery Owners

Idoia Fernández, president of the Consortium and co-director of the contemporary art gallery NF/NIEVES FERNANDEZ, cannot make sense of the government’s silence. Will there be another protest at ESTAMPA? “I honestly don’t know. We’ve done so much, so I don’t know. Hopelessness is settling in,” she tells The Art Journal.

Spain’s VAT policy is particularly punitive to Spain’s visual arts. Much of the bewilderment surrounding the issue is that reduced rates for arts and culture already exist, but only apply to performing arts, music or audiovisual production, leaving out visual arts entirely. “Protecting visual arts would be important in any country, but for a country like Spain, that takes pride in being on the pages of art history! It’s incomprehensible to me,” Fernández says.

After the ARCO fiasco, the conservative Isabel Díaz Ayuso, president of the region of Madrid and fierce critic of Pedro Sánchez’s government, weighed on the controversy with an announcement of a 100 percent tax rebate on a 4 percent transfer tax levied on the resale of artworks. The measure, however, applies exclusively to transactions between individuals through specialised galleries and dealers in the region of Madrid, and does nothing about the VAT protested by contemporary art galleries, which is set at the national level. “It changes nothing for us,” Fernández says.

Studying the Issue

For years, the Consortium has attended meetings with the Ministry of Culture, the Treasury and political parties to explain the situation and ask them to solve it. “If there’s been a breakthrough, if there’s someone somewhere drafting a new bill, we don’t know about it.”

Sources from the Ministry of Culture told Europa Press that Urtasun favours a reduced VAT rate, but that the final decision lies with the Treasury. On September 15th, budget Minister Arcadi España told the Senate that the Treasury is “studying” the issue, but no timeline has been announced. Asked for comment, the Treasury referred back to España’s remarks.

To remain competitive, many Spanish galleries turn to legally risky practices. Luis Valverde, director of the gallery Espacio Mínimo, explains that some galleries reduce the VAT burden on the buyer by applying a 10 percent rate to the artist’s share of the price, as though the artist had sold the work directly, and apply the 21 percent rate to their own profit margin only.

The gallery still bears the brunt of the high tax rate, but the resulting price is more attractive to collectors. “We don’t know to what extent this is legal—some advisors say yes, some say no,” he tells The Art Journal.

For him, it’s not worth the risk, but the practice is common and galleries might feel pressured into it. “You can end up having issues depending on the auditor,” he explains. Valverde founded Espacio Mínimo 35 years ago and is exhausted by the government’s inaction: “It’s like groundhog day. I feel like I have died and I’m trapped in eternity, where nothing changes.”