Transfer tax on artwork to be postponed for two years

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Transfer tax on artwork to be postponed for two years

A government plan to impose a capital gains tax on artwork transactions starting next year will be postponed by two years at the request of lawmakers and industry executives, who have expressed concern about a prolonged slump in the local art market, officials said this week.

In 2008, the government prepared a bill to levy a 20 percent tax on capital gains from the trade of any artwork created by deceased artists and valued at over 60 million won ($53,000), starting in 2011, in a bid to heighten the transparency of the domestic art market.

The government had intended to make all the art dealings transparent by imposing the transfer tax, but the art community has argued that the tax would strike a heavy blow to the art market, which is already mired in a deep slump.

Industry executives have complained that the planned taxation would virtually paralyze the art market by keeping private collectors from selling their artwork.

Responding to the petition from the local art community, a subcommittee of the National Assembly’s Strategy and Finance Committee agreed Monday to postpone the enforcement of the artwork capital gains tax bill by two years.

Art galleries and their association welcomed the decision and said they will step up efforts to improve transparency in the art trade.

“We will establish a system for enhancing transparency and standardizing the art market,” said the Galleries Association of Korea. “We will do our best to improve the environment for creating art and support painters.”

“Now is the time to seek ways to help the art community in cooperation with the government,” said Woo Chan-kyu, chief of Hakgojae Gallery.

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