Pure Evil
Artist
Junior Member
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December 2006
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Artist Resale Rights, by Pure Evil on Sept 22, 2007 16:56:09 GMT 1, So in 2006 a new law was passed which covers resale rights...
This must mean that every time Banksy resellers make a sale over 10000euros he is dude a cut right.... thats a NUTTY rule... Laz should give Andipa a call...
What is an artist’s re-sale right?
The Artist Resale Rights Regulations 2006 were enacted by Statutory Instrument No 346 and came into force on 14 February 2006. These Regulations provide an author of work in which copyright subsists the right to a royalty on any sale of work which is a resale subsequent to the first transfer of ownership by the author.
This right exists for as long as copyright subsists in the work and is based on the sale price. The sale price is the price obtained for the sale, net of the tax payable on the sale, and converted into euros at the European Bank reference rate prevailing at the contract date.
What constitutes ‘transfer of ownership’?
There is not a definitive definition in the regulations but it does include:
* Transmission of the work from the author by testamentary disposition, or in accordance with the rules of intestate succession;
* Disposal of the work by the author’s personal representatives for the purposes of the administration of his estate; and
* Disposal of the work by an official receiver (Including Official Receiver for Northern Ireland) or a trustee in bankruptcy, for the purposes of the realisation of the author’s estate.
What constitutes a ‘resale’ under the regulations?
Whether or not the original transfer of ownership was made for money or any other consideration, the sale of a work is regarded as a resale if:
* The buyer or seller or the agent of the buyer or seller is acting in the course of business of dealing in works of art; AND
* The sale process is not less than €1,000 euro.
If the seller previously acquired the work directly from the author less than three years before the sale and the price does not exceed €10,000 euro the sale of a work is NOT regarded as a resale for these purposes.
What works are covered?
The works that are covered by these regulations are any work of graphic or plastic art such as a picture, a collage, a painting, a drawing, an engraving, a print, a lithograph, a sculpture, a tapestry, a ceramic, an item of glassware or a photograph.
Is a ‘copy’ considered a work under the regulations?
The only circumstance where a copy is considered to be a work under the regulations is if the copy is one of a limited number which have been made by the author or under his supervision
What happens if the work is of joint authorship (i.e. created by two or more authors)?
In this instance, the resale right would belong to both authors in equal shares unless there is agreement to the contrary. Where there is such an agreement it must be in writing and signed by or on behalf of each party to the agreement.
How will the authorship be proved?
Where a name purporting to be that of the author appeared on the work when it was made, the person whose name appeared shall be presumed to be the author of the work, unless the contrary is proved. In the case of a work alleged to be a work of joint authorship this principle will apply to each person alleged to be one of the authors.
Who is a qualifying individual under the regulations?
To be a qualifying individual one must be a national of an EEA state or a national of one of 26 countries listed in Schedule 2 of the enabling Statutory Instrument.
Does the ‘qualifying person’ (artist) have to be living in order to qualify?
Yes. In the UK only living artists qualify at the present time due to the decision to exercise the derogation contained in the original Directive. This will be the position until 2010 at the earliest and may be further extended.
Can an artist waive the resale right?
No. A waiver by an author of the resale right will have no effect and any agreement to share or repay resale royalties will be void
Who is eligible to pay the resale royalty?
There is a joint a several liability placed on the seller AND the ‘relevant person’. The relevant person can be one of three people:
* The seller’s agent; or
* Where there is no seller’s agent, it is the buyer’s agent; or
* Where there is no buyer’s agent, it is the buyer
When does liability to pay the royalty arise?
The liability arises on completion of the sale. However, payment may be withheld until evidence of entitlement to the royalty is produced. In cases where the resale right belongs to two or more people the liability to pay the resale royalty is discharged once it is paid to one of those persons.
How should I implement the resale right regulations?
Interpretation and administration of the regulations is a matter for consideration for each auction house/ individual who has obligations under the regulations. Whatever decision is taken should be clearly reflected in the current Conditions of Business.
Are these regulations retrospective?
These regulations are not retrospective in that where a sale contract date precedes the commencement of the regulations, the resale right does not apply. In cases where the work sold after the regulations were implemented but was made before the commencement of the regulations, the resale right does apply.
Who collects the resale right?
Resale rights may only be collected by an appointed ‘collecting society’. At the date of commencement only one collecting society has been identified in the UK i.e. The Design and Copyright Society (DACS).
Even if a holder of the resale right has not transferred the management of his right to a collecting society, the collecting society which manages copyright on behalf of artists will be deemed to be mandated to manage his right. In the event of there being more than one collecting society, the holder may choose which of them is mandated.
What is a ‘collecting society’?
These bodies are defined in the Copyright, Design and Patents Act 1988 and exist to manage copyright and related rights on behalf of creators such as artists, songwriters, authors and performers.
What is DACS?
Established in 1984, DACS represents 52,000 artists and their beneficiaries. A not-for-profit organisation, they cover operating costs by deducting commission from the royalties collected on behalf of artists.
What does management of the resale right involve?
It means the collection of resale royalties on behalf of holders of the right in return for a fixed fee or a percentage of the royalties.
What is an art market professional?
And at market professional is deemed to be ‘any individual acting in the course of a business of dealing in works of art’. In reality this will include galleries, dealers, auction houses and agents. It does not include museums and collectors, private or corporate.
What are my obligations as an art professional?
You have an obligation to respond to information requests from collecting societies which will enable them to calculate resale royalties that may be due to an artist. The collecting societies will then invoice you for any royalties that are due. You should provide information of all sales fulfilling the following criteria:
* The work is sold for £600 or more (to allow for fluctuations in the euro exchange rate)
* The work was sold by a living artist in the UK
* The work was sold by a living artist from the EEA or other reciprocal country
How do I respond to an ‘information request’?
The collecting agencies will be contacting you regularly. You must respond within 90 days of receiving this request. There are a number of ways you can respond:
* Upload a data file – e.g. Word, Excel or text files;
* Download a resale submission form – DACS have a downloadable Rich Text File available on their website in which you can type the resale data;
* Send in the catalogue – in addition to sale results
What information will I be asked to include?
* Date of sale
* Name of artist
* Date of birth (if known)
* Nationality (if known)
* Title of work
* Medium
* Edition number (where applicable)
* Sale price (excluding VAT)
How much will the royalty be?
Royalty rates are calculated as a percentage of the sale price and are set out in a sliding scale from 4% to 0.25%.
0 – 50,000 euros - 4%
50,000 – 200,000 euros - 3%
200,000 – 350,000 euros - 1%
350,000 – 500,000 euros - 0.5%
Exceeding 500,00 euros - 0.25%
Therefore, the higher the value of the art work, the lower the overall rate. Royalties are calculated on the whole price excluding VAT.
If the sales price cuts across more than one royalty band the royalty on each portion of the price will be added together to calculate the final sum. The maximum royalty an artist can earn is €12,500 which apples to sales of €2million and above. Royalty rates are not open to negotiation as they are set by law.
How can I find out how much the royalties would be before I plan a sale?
You can make a submission to DACS before the sale and you will be advised how much can be expected to be due if the work is sold but this will only be an estimate. The actual sale price and the exchange rate will need to be confirmed before the actual royalty can be calculated.
If a work changes hands several times in a short period of time will the resale royalty apply?
If the qualifying conditions are met, a resale royalty will apply to each transaction. However, if a dealer is acting purely as an agent (i.e. title to the work never passes to the agent) in a consignment than it is not a sale. Therefore, where a work is consigned for sale in these circumstances and the agent then sells the work to a buyer, that is considered to be one transaction.
VAT?
Vat does to apply to the artists resale royalty. The royalty is calculated on the sales price excluding VAT and the resale royalty is not subject to VAT.
So in 2006 a new law was passed which covers resale rights...
This must mean that every time Banksy resellers make a sale over 10000euros he is dude a cut right.... thats a NUTTY rule... Laz should give Andipa a call...
What is an artist’s re-sale right?
The Artist Resale Rights Regulations 2006 were enacted by Statutory Instrument No 346 and came into force on 14 February 2006. These Regulations provide an author of work in which copyright subsists the right to a royalty on any sale of work which is a resale subsequent to the first transfer of ownership by the author.
This right exists for as long as copyright subsists in the work and is based on the sale price. The sale price is the price obtained for the sale, net of the tax payable on the sale, and converted into euros at the European Bank reference rate prevailing at the contract date.
What constitutes ‘transfer of ownership’?
There is not a definitive definition in the regulations but it does include:
* Transmission of the work from the author by testamentary disposition, or in accordance with the rules of intestate succession;
* Disposal of the work by the author’s personal representatives for the purposes of the administration of his estate; and
* Disposal of the work by an official receiver (Including Official Receiver for Northern Ireland) or a trustee in bankruptcy, for the purposes of the realisation of the author’s estate.
What constitutes a ‘resale’ under the regulations?
Whether or not the original transfer of ownership was made for money or any other consideration, the sale of a work is regarded as a resale if:
* The buyer or seller or the agent of the buyer or seller is acting in the course of business of dealing in works of art; AND
* The sale process is not less than €1,000 euro.
If the seller previously acquired the work directly from the author less than three years before the sale and the price does not exceed €10,000 euro the sale of a work is NOT regarded as a resale for these purposes.
What works are covered?
The works that are covered by these regulations are any work of graphic or plastic art such as a picture, a collage, a painting, a drawing, an engraving, a print, a lithograph, a sculpture, a tapestry, a ceramic, an item of glassware or a photograph.
Is a ‘copy’ considered a work under the regulations?
The only circumstance where a copy is considered to be a work under the regulations is if the copy is one of a limited number which have been made by the author or under his supervision
What happens if the work is of joint authorship (i.e. created by two or more authors)?
In this instance, the resale right would belong to both authors in equal shares unless there is agreement to the contrary. Where there is such an agreement it must be in writing and signed by or on behalf of each party to the agreement.
How will the authorship be proved?
Where a name purporting to be that of the author appeared on the work when it was made, the person whose name appeared shall be presumed to be the author of the work, unless the contrary is proved. In the case of a work alleged to be a work of joint authorship this principle will apply to each person alleged to be one of the authors.
Who is a qualifying individual under the regulations?
To be a qualifying individual one must be a national of an EEA state or a national of one of 26 countries listed in Schedule 2 of the enabling Statutory Instrument.
Does the ‘qualifying person’ (artist) have to be living in order to qualify?
Yes. In the UK only living artists qualify at the present time due to the decision to exercise the derogation contained in the original Directive. This will be the position until 2010 at the earliest and may be further extended.
Can an artist waive the resale right?
No. A waiver by an author of the resale right will have no effect and any agreement to share or repay resale royalties will be void
Who is eligible to pay the resale royalty?
There is a joint a several liability placed on the seller AND the ‘relevant person’. The relevant person can be one of three people:
* The seller’s agent; or
* Where there is no seller’s agent, it is the buyer’s agent; or
* Where there is no buyer’s agent, it is the buyer
When does liability to pay the royalty arise?
The liability arises on completion of the sale. However, payment may be withheld until evidence of entitlement to the royalty is produced. In cases where the resale right belongs to two or more people the liability to pay the resale royalty is discharged once it is paid to one of those persons.
How should I implement the resale right regulations?
Interpretation and administration of the regulations is a matter for consideration for each auction house/ individual who has obligations under the regulations. Whatever decision is taken should be clearly reflected in the current Conditions of Business.
Are these regulations retrospective?
These regulations are not retrospective in that where a sale contract date precedes the commencement of the regulations, the resale right does not apply. In cases where the work sold after the regulations were implemented but was made before the commencement of the regulations, the resale right does apply.
Who collects the resale right?
Resale rights may only be collected by an appointed ‘collecting society’. At the date of commencement only one collecting society has been identified in the UK i.e. The Design and Copyright Society (DACS).
Even if a holder of the resale right has not transferred the management of his right to a collecting society, the collecting society which manages copyright on behalf of artists will be deemed to be mandated to manage his right. In the event of there being more than one collecting society, the holder may choose which of them is mandated.
What is a ‘collecting society’?
These bodies are defined in the Copyright, Design and Patents Act 1988 and exist to manage copyright and related rights on behalf of creators such as artists, songwriters, authors and performers.
What is DACS?
Established in 1984, DACS represents 52,000 artists and their beneficiaries. A not-for-profit organisation, they cover operating costs by deducting commission from the royalties collected on behalf of artists.
What does management of the resale right involve?
It means the collection of resale royalties on behalf of holders of the right in return for a fixed fee or a percentage of the royalties.
What is an art market professional?
And at market professional is deemed to be ‘any individual acting in the course of a business of dealing in works of art’. In reality this will include galleries, dealers, auction houses and agents. It does not include museums and collectors, private or corporate.
What are my obligations as an art professional?
You have an obligation to respond to information requests from collecting societies which will enable them to calculate resale royalties that may be due to an artist. The collecting societies will then invoice you for any royalties that are due. You should provide information of all sales fulfilling the following criteria:
* The work is sold for £600 or more (to allow for fluctuations in the euro exchange rate)
* The work was sold by a living artist in the UK
* The work was sold by a living artist from the EEA or other reciprocal country
How do I respond to an ‘information request’?
The collecting agencies will be contacting you regularly. You must respond within 90 days of receiving this request. There are a number of ways you can respond:
* Upload a data file – e.g. Word, Excel or text files;
* Download a resale submission form – DACS have a downloadable Rich Text File available on their website in which you can type the resale data;
* Send in the catalogue – in addition to sale results
What information will I be asked to include?
* Date of sale
* Name of artist
* Date of birth (if known)
* Nationality (if known)
* Title of work
* Medium
* Edition number (where applicable)
* Sale price (excluding VAT)
How much will the royalty be?
Royalty rates are calculated as a percentage of the sale price and are set out in a sliding scale from 4% to 0.25%.
0 – 50,000 euros - 4%
50,000 – 200,000 euros - 3%
200,000 – 350,000 euros - 1%
350,000 – 500,000 euros - 0.5%
Exceeding 500,00 euros - 0.25%
Therefore, the higher the value of the art work, the lower the overall rate. Royalties are calculated on the whole price excluding VAT.
If the sales price cuts across more than one royalty band the royalty on each portion of the price will be added together to calculate the final sum. The maximum royalty an artist can earn is €12,500 which apples to sales of €2million and above. Royalty rates are not open to negotiation as they are set by law.
How can I find out how much the royalties would be before I plan a sale?
You can make a submission to DACS before the sale and you will be advised how much can be expected to be due if the work is sold but this will only be an estimate. The actual sale price and the exchange rate will need to be confirmed before the actual royalty can be calculated.
If a work changes hands several times in a short period of time will the resale royalty apply?
If the qualifying conditions are met, a resale royalty will apply to each transaction. However, if a dealer is acting purely as an agent (i.e. title to the work never passes to the agent) in a consignment than it is not a sale. Therefore, where a work is consigned for sale in these circumstances and the agent then sells the work to a buyer, that is considered to be one transaction.
VAT?
Vat does to apply to the artists resale royalty. The royalty is calculated on the sales price excluding VAT and the resale royalty is not subject to VAT.
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Artist Resale Rights, by finsburyparkranger on Sept 22, 2007 17:24:29 GMT 1, Artist Resale Rights actually looks like a good law for once.... I wonder what happens when people refuse to co-operate?
I like the rule that if you bought from the artist direct in the last 4 years you can sell without paying anthing. Collectors are let off the hook and anyone can sell anything under £600 with no re-course.
Artist Resale Rights actually looks like a good law for once.... I wonder what happens when people refuse to co-operate?
I like the rule that if you bought from the artist direct in the last 4 years you can sell without paying anthing. Collectors are let off the hook and anyone can sell anything under £600 with no re-course.
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