Droit de Suite

Droit de Suite legislation was implemented in February 2006.  The government appears to have reneged on what British Art Market Federation (BAMF) chairman Anthony Browne and president Lord Brooke of Sutton Mandeville believed was its position when they met Trade and Industry minister Lord Sainsbury in October 2005, and to have made the levy tougher than even the EU demanded.

The information below is offered in good faith.  You should seek formal advice if you feel that the legislation applies to your business.

Who will be affected by this?

You will only be affected by Droit de Suite if:

(1) you sell (definition below) an original work of art (definition below); and

(2) at the time you sell such a work of art the artist or creator is still alive, and from 2010 the right applied to the works of dead artists up to seventy years after death.

What is an original work of art?

Paintings, drawings and sculpture are the most obvious categories of item included in the definition. However, other forms of art will be caught by the new law. The EU directive states:

'original work of art' means works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs, provided they are made by the artist himself or are copies considered to be original works of art.

Plastic art is taken to mean forms such as sculpture. See below for information on design bindings.

When is a sale not a sale?

Strictly speaking the royalty applies only to all resales, i.e all sales that follow the first transfer of ownership by the artist. It does not therefore apply to the first sale by the artist to the dealer.

How much Droit de Suite will be payable?

The levy is calculated on the sale price, not on profit, as follows:

No droit de suite is payable on:

Resales for less than €1,000

Sales where the seller has acquired the work directly from the artist and resells within 3 years for less than €10,000

Rates for all other sales:

4% for the portion of the sale price up to €50,000

then add 3% for the portion of the sale price between €50,000 & €200,000

then add 1% for the portion of the sale price between €200,000 & €350,000

then add 0.5% for the portion of the sale price between €350,000 & €500,000

then add 0.25% for the portion of the sale price between €500,000 & €2,000,000

The portion of the sale price above €2,000,000 will not incur the levy because the total amount of Droit de suite payable cannot exceed €12,500.

Droit de Suite - Levy on Designer Bindings

Following a report that a lot of books with design bindings sold at Sotheby's was subject to the Droit de Suite levy, we have sought advice from the Design and Artists Copyright Society (DACS). They say that:

"Books are subject to the levy if the intrinsic value of the book comes from the artistic craftsmanship of a single named artist". That is, where a book was created to be a work of art as opposed to just a text bound together. A typical indicator would be where a binding has been described in a catalogue as having been bound by a "single named artist" and that the value of the book is as a direct consequence of the binders artistry: i.e. it "gains its value by being a work of art".

"Works created in the course of employment do not attract a resale royalty". This means that bindings produced under business names such as Bayntun's, Zaehnsdorf's and Chelsea Bindery etc. do not attract the levy. It is the individual binder's name, not the company name, that lends the value to the binding.

The businesses that are investigated by DACS are classified as "art market professionals", who are defined as "galleries, auction houses or dealers whose core business is dealing in works of art". DACS will monitor auction house catalogues and will write periodically to all other businesses on their databases. Such businesses, which would not appear to include the majority of ABA members, would need to respond, declaring all relevant sales, within ninety days.

Against a law which is difficult to interpret and apply, the advice from DACS seems pretty sensible to us.