Deliveries of work

The following explanations refer to deliveries of works (as defined in Section 3 (4) UStG), such as deliveries of works of art. Information on the taxation of miscellaneous services such as the granting of rights of use and other independent services (performances etc.) can be found here:

Independent services such as performances, lectures etc.

Granting of rights of use for copyrighted works etc.

For deliveries of works, the question of whether the buyers are businesses/entrepreneurs (B2B: Business to Business) or private individuals (B2C: Business to Consumer) is significant.
As with all cross-border transactions, it is necessary to determine the country in which value added tax must be paid (where) and who must pay this tax (who).

Please note: Member State (within the EU) – third country (outside the EU)

Whether the goods are dispatched from Germany to an EU Member State (hereinafter referred to as Member State) or from a country outside the EU (hereinafter referred to as third country) plays a decisive role in determining the country in which the value added tax must be paid (where) and who is liable to pay the value added tax (who).

B2B (Business to Business)

B2B refers to a delivery or miscellaneous service performed by a business person in return for a fee as part of his or her business. Artists are usually also business persons.

If the buyer provides a VAT ID to the supplying business, it can be assumed that they have business status (Section 6a.1. (13) UStAE).

A VAT ID is assigned to any business person within the EU upon request and is regarded as an attribute of a person's entrepreneurial status.

The VAT ID must be checked at the time of delivery. The  qualified confirmation procedure (only available in German) of the German Federal Central Tax Office (BZSt) is recommended for this purpose.

In which country must value added tax be paid (where)?

The place of delivery is the place where the shipment originates, i.e. Germany (intra-Community acquisition, cf. Section 3 (6) UStG).

However, in the case of contracts between two businesses, the delivery is exempt from value added tax in Germany (intra-Community supply, cf. Section 4 No. 1 (b) in conjunction with Section 6a UStG). Therefore, no value added tax need be paid in Germany.

Who has to pay value added tax (who)?

The delivery is exempt from value added tax in Germany, so the artist in the example does not have to pay value added tax in Germany.

The buyer of the goods is subject to the value added tax regulations in his or her country and must presumably pay the value added tax there in accordance with the German regulations for intra-Community acquisitions (cf. delivery from a Member State to Germany), cf. Section 6 a (1) No. 3 UStG.

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Important!
The artist can only invoke the exemption if she can prove that the goods have arrived abroad.

Note on invoicing:
In this case, the artist does not have to list value added tax on the invoice. The artist should list her own VAT ID and the gallery's VAT ID and include a note referencing the tax liability. The gallery in the Member State should therefore request a VAT ID to provide to the seller (the artist).  Otherwise the artist runs the risk of having to pay the value added tax again in Germany or in her Member State.

Sample wording:
Pursuant to Section 4 No. 1 b in conjunction with Section 6 a UStG, the delivery is not taxable in Germany.

A VAT ID is assigned to any business person within the EU upon request (only in his or her own country of residence) and is regarded as an attribute of a person's entrepreneurial status.
The VAT ID must be checked at the time of delivery. The qualified confirmation procedure (only available in German) of the German Federal Central Tax Office (BZSt) is recommended for this purpose.

Important!
Supply chains cannot be taken into account here because they involve very different regulations and can be highly complex depending on the specific situation. It is advisable to seek individual tax advice in such cases. 

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B2C (Business to Consumer)

The term B2C is used when the buyer of the delivery is not a business person (Business to Consumer).

In which country must value added tax be paid (where)?

1. Up to the delivery threshold applicable throughout the EU (10 000 Euro)

Deliveries of works from Germany to private individuals in another Member State up to the delivery threshold of 10 000 Euro are taxable in the country of origin of the shipment and not at the shipping destination (cf. Section 3 (6) UStG, Section 3 c (3) No. 2 UStG). Accordingly, the place of delivery is Germany.

Note on invoicing:
The artist issues a "regular" invoice according to German law.

2. Exceeding the delivery threshold applicable throughout the EU (10 000 Euro)

After the delivery threshold has been exceeded, the place of delivery is the other Member State. This is the place, where VAT is due. Therefore, the artist can participate in the so-called One-Stop-Shop-procedure (only available in German). More info coming soon.

>>> YouTube-Video: BVDG - Florian Greiner (DELTAX): Das neue EU-Mehrwertsteuer-Digitalpaket und der sog. OSS/ One-Stop-Shop (2021, in German)

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The following applies to the export of a work of art from Germany to a third country:

The export is exempt from value added tax in Germany (pursuant to Section 4 No. 1(a) in conjunction with Section 6 UStG),

• if the supplier has transported or dispatched the goods to the third country and the goods have arrived in the third country or
• if the customer has dispatched or transported the goods, the goods have arrived in the third country and the customer is based abroad.  

Value added tax is levied upon importation into the receiving country at the tax rate applicable there.

You can find more information on customs regulations at touring artists here.

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