1. Tax only applies when it leaves the freeport / is imported somewhere. Import duties can sometimes also be avoided by holding assets through offshore vehicles

1. Tax only applies when it leaves the freeport / is imported somewhere. Import duties can sometimes also be avoided by holding assets through offshore vehicles. Also, certain countries exempt museums from paying import duties. Many wealthy people actually have part of their home classified as a museum. 2. These items are often held as an investment, i.e. buy for $20mm and sell five years later for $25mm. 3. If you only care about the capital gain on the art (and not about what is actually on the canvas), you don't want to pay the VAT rate, because that's (often) not recoverable. 4. You can probably get a $10-15mm loan against a $20mm painting. If you can sell that $20mm painting for $25mm in five years, with $5m equity down, you will have doubled your money. That's an 18-20% annual return (after deducting interest expenses).