Did you know
The Artist’s Resale Right (“ARR”) affords the creators of original works of art, which include graphic works, paintings, sculptures and collages, the right to a royalty when their work is resold through a qualifying intermediary, such as an auction house or art dealer.
What does that mean
As an artist I sell my artworks to you the customer. If at some later date I become famous and you, the customer, then decide to sell my artwork through an auction house or gallery. I, the artsist, am entitled to a percentage of that sale.
Sounds simple enough – not quite.
How to Benefit
This is not an international arrangement.
More than 70 countries, including the UK and EU countries, provide for resale royalties to visual artists
Currently, California is the only state in the USA that recognizes the resale right.
In France droit de suite (resale royalty) has been recognised since 1920. A percentage due on the sale of said work is paid during the life of the artist plus 70 years. Originally the seller of the artwork was liable for paying the royalty, and then in 2018 the French Supreme Court held that while “an auction house is ultimately responsible for paying the levy to the collecting agency,” it has the “right to ask for the money from the buyer – so long as the conditions of sale includes such a clause.” Therefore, it mostly falls on the new owner to pay.
In Italy when they first adopted the the right in 2006 they chose to apply the collection of royalties on primary sales too. Consequently all artwork sales by galleries were included.
This was criticised by the industry as the artist received money as royalties when the work was first sold which didn’t make any sense. It also put Italian galleries at a financial disadvatage.
New guidelines were published in early 2019 by the Società Italiana degli Autori ed Editori (“SIAE”). These stated that the resale right only applies when the sale follows the first one made by the creator and takes place through an art market proffessional for more than €3,000
Artists qualifying for these rights at the moment are nationals of the European Economic Area.
The Artist’s Resale Right was introduced as an amendment to the UK’s copyright law in 2006 in accordance with the EU directive.
It was implemented in two phases. The first was applied only to resale of artworks by living artists. Followed in 2012 to include the right to artists who died within 70 years of the date of the resale. This is paid into the estate of the artist.
After the 1st of January 2021 the UK was no longer part of the EEA but the UK government is committed to preserving the status quo on matters of copyright and artist resale royalties.
What work Qualifies
If the artwork in question was bought directly from the artist less than three years ago and is being resold for €10,000 or less, no royalty will be payable.
The right only applies when the sale price reaches or exceeds the sterling equivalent of €1,000 and is calculated on a sliding scale.
Royalty Resale price
4% up to €50,000
3% between €50,000.01 and €200,000
1% between €200,000.01 and €350,000
0.5% between €350,000.01 and €500,000
0.25% in excess of €500,000
This scale is also cumulative in much the same way as income tax is calculated. For example, the royalty payable for an art work sold for €200,000 would amount to €6,500. This is made up of:
1st tier 0 to €50,000 will attract a royalty of 4% ie €2,000
2nd tier €50,001 to €200,000 will attract a royalty of 3% ie €4,500
Royalties are also capped so that the total amount of the royalty paid for any single sale of a work cannot exceed €12,500.
ARR is exempt of VAT.
Collection of Royalties
Individual artists cannot request payments directly. Resale right in the UK is managed by collecting societies who then distribute the royalty.
More information can be found at the Design and Artists Copyright Society (DACS) or Artists Collecting Society (ACS).
Frequently asked questions on ARR are answered on the DACS website.
Works Cited
https://www.gov.uk/guidance/artists-resale-right https://itsartlaw.org/2019/07/01/its-not-that-easy-artist-resale-royalty-rights-and-the-art-act