ART has not only cultural value but also actｓ as a driver for economic growth. European and Asian countries expand the art market through institutional reforms, such as a tax cut.

In contrast, Japan’s art market accounts for only 1% of the global market, and the country is increasingly under pressure to implement institutional reforms.

European Countries Incorporate Art Into Their Industry Strategies

For example, Italy reduced VAT on artworks, antiques, and collection items from 22% to 5% last summer. As a result, the Contemporary Art Fair’s trading volume jumped 20% YoY, attracting new clients. Consequently, the Italian market has raised its profile in the global art market and is poised to become more attractive for audiences.

Similarly, Germany reduced VAT on artworks from 19% to 7% in January 2025. Meanwhile, France applies a favorable VAT rate of 5.5% to artworks, while other items are taxed at 20%.

These examples demonstrate how European countries try to incorporate art and culture into their industry strategies. Notably, while public expenditure on art and culture is decreasing, private sector spending on the art market is increasing.

Turning to Asia, Korea is most active in fostering the art industry, treating it as a national strategic industry. Korea established the “Art Initiatives Law” in 2024, and Frieze Seoul is becoming a platform for promoting Korean contemporary art to the global market.

Under the law, dealers and auction houses are obliged to provide a certification to guarantee the quality of the products to buyers. Thus, market transparency improves, leading to new financial services, such as art funds and loans backed by artworks.

Moreover, when the artworks are resold, a part of the profits will be distributed to artists. Every five years, the government prepares the art market report to review the achievements. The practice of companies using contemporary art for branding is spreading.

What should Japan do?

Japan’s art market volume was US$681 million in 2023, accounting for 1% of the global market. The reform is indispensable for Japan to raise its profile in the global art market.

As a tax measure, a reduced consumption tax and a reduction in donation rates for artworks are required. On the financial side, it is necessary to create or improve the art fund and the art loan system. Needless to say, long-term policies such as fostering younger collectors and strengthening art education are important.

Even if the government works on the tax system and rule reforms, the private sector should work to improve the art market. Public-private partnership is sought now more than ever before.

(Source:  art NIKKEI, Art Fair Tokyo special edition, March 7^th 2026 issue)