The profit-margin scheme offers art dealers two VAT calculation methods: the operation-by-operation margin (default regime, CGI art. 297 A) and the global margin (on formal option, CGI art. 297 B). Both lead to the same result on homogeneous margins, but the global method allows profitable and loss-making transactions to be offset over a quarter. It nonetheless requires a minimum commitment of 2 years. The trade-off turns on the heterogeneity of margins and on accounting capacity.
The margin scheme (CGI art. 297 A and following) allows taxable dealers in works of art to calculate VAT on the profit margin instead of on the sale price, where the work was acquired free of VAT (from a private individual or from another taxable dealer under the same regime).
Two calculation methods are possible: (1) the operation-by-operation margin, the default regime, which calculates VAT for each sale individually (VAT = (VAT-inclusive sale price − purchase price) × 20/120); (2) the global margin, on option (CGI art. 297 B), which aggregates all eligible sales on a quarterly basis and offsets profitable against loss-making ones.
Opting for the global margin creates value only where margins are heterogeneous (some sales at a loss). It does, however, commit the dealer for a minimum of 2 years and requires rigorous cost accounting. On homogeneous positive margins, both regimes reach the same result.
VAT calculation for each sale individually, with no offsetting between transactions.
Quarterly aggregation of margins, with offsetting between profitable and loss-making transactions.
The choice between the two regimes depends on the structure of the margin and on the dealer's accounting capacity.
The main causes of VAT reassessment for art dealers stem from defects in formality or documentation.
Contemporary art dealer, 5 sales over a quarter — operation-by-operation vs global comparison.
Take a contemporary art dealer making 5 sales over a quarter. Let us compare the two regimes against heterogeneous margins, typical of the art market where some works are resold at a loss.
Sale 1: margin +10,000 € → VAT 1,666 €. Sale 2: margin +5,000 € → VAT 833 €. Sale 3: margin -2,000 € → VAT 0 € (no refund). Sale 4: margin +8,000 € → VAT 1,333 €. Sale 5: margin -3,000 € → VAT 0 €. Total VAT due: 3,832 €. The losses on sales 3 and 5 (5,000 €) do not reduce the base.
Aggregated global margin = 10,000 + 5,000 − 2,000 + 8,000 − 3,000 = 18,000 €. VAT due = 18,000 × 20/120 = 3,000 €. A saving of 832 € over the quarter, roughly 22% less VAT thanks to the offsetting of losses.
On homogeneous positive margins (all sales profitable and margins similar), the global option brings nothing. It becomes advantageous as soon as ≥ 20% of sales are at a loss or margins vary sharply (typical of speculative contemporary art). To be measured over 12 months of history before committing for 2 years.
To secure the margin scheme (default OR global), assemble for each transaction: the purchase invoice from the private individual or the other taxable dealer (bearing the note "VAT on margin"), proof of identity of the private seller, the certificate of authenticity of the work, and an up-to-date police register (record of entries and exits). Without this documentation, reclassification to VAT on the full price is possible.
Me Jonathan Bensaid, founding partner of the firm, admitted to the Paris & Geneva Bars, advises art dealers, galleries and auction houses on optimising the VAT regime (global option, securing the margin scheme, reclassification litigation, interaction of VAT / corporate income tax / commercial-profits tax). Historical audit of margins, comparative simulation, formalisation of the option, litigation defence.
No. The margin scheme applies only to works acquired free of VAT (from a non-taxable private individual, or from another taxable dealer already invoicing under this regime). For works acquired with recoverable VAT (from a taxable artist, on import), the standard VAT regime applies. A dealer may therefore have transactions under both regimes in parallel.
By a prior declaration to the corporate tax office (SIE). The declaration must state the minimum 2-year commitment. Once exercised, the option applies to all the dealer's eligible transactions for the duration of the commitment. The quarterly CA3 form is then completed by aggregating the margins over the period.
The work retains its "margin scheme" status. The selling dealer's invoice must expressly mention "VAT on margin — CGI art. 297 A" so that the buyer (another dealer) may in turn apply this regime on its own resale. The margin chain is thus preserved. Without this mention, the buyer cannot apply the regime on its resale.
No, save in exceptional cases (cessation of activity, transfer of the business, litigation reassessment). The 2-year commitment is firm. It cannot be revoked unilaterally by the dealer. This is precisely why a prior historical audit is indispensable: the option is not to be taken lightly.
The tax authorities check as a priority: (1) the reality of the VAT-free character of the acquisition (invoices from private individuals, copies of the seller's identity documents), (2) the keeping of the police register mandatory for antique and art dealers, (3) the consistency of the declared margins with the market values of the works concerned. The main risk is a reclassification to VAT on the full price, i.e. roughly 5 times more VAT due, hence the importance of preventive documentation.
Related resources on the taxation of art dealers, collectors and income tax / VAT in the trade.
Regime of occasional collectors vs habitual dealers — a critical boundary for the tax characterisation.
Voir la page Related articleConditions for benefiting from the margin scheme — qualification as a taxable dealer, eligible transactions.
Voir la page Area of practiceAcquisitions, transfers, litigation: advising collectors and art dealers.
Voir la page Lead counselPartner in charge of Art matters, dealers and auction houses.
Voir la pageA confidential first exchange. Historical audit of margins over 12-24 months, comparative simulation of operation-by-operation vs global, formalisation of the option with the tax office where relevant, documentary securing of the margin scheme.
Written by
Me Jonathan Bensaid, avocat fiscaliste, fondateur du cabinet Bensaid Avocats, inscrit aux Barreaux de Paris & Genève.
© BENSAID Avocats — The information published on this site does not constitute legal advice. Sources: CGI art. 297 A (margin scheme), CGI art. 297 B (global-margin option), CGI art. 297 D; BOI-TVA-SECT-90 (special regime for second-hand goods, works of art and antiques); police-register obligations, art. 321-7 of the Criminal Code; CJEU and Conseil d'État (case law on the margin scheme). Editorial update: 27 April 2026.