Relevant Laws

In China, there is no dedicated Art Law; instead, the term “art law” refers collectively to the laws applicable to artworks as their subject matter. The main laws involving artworks include:

• the Civil Code;
• the Copyright Law;
• the Trademark Law;
• the Patent Law;
• the Anti-Unfair Competition Law;
• the Law on the Protection of Cultural Relics;
• the Law of the People’s Republic of China on Securities Investment Funds;
• the Trust Law; and
• the Charity Law.

Relevant Authorities

The administrative departments primarily involved in overseeing artworks include those responsible for culture and tourism, cultural relics protection, intellectual property rights, market supervision, financial and securities regulation, and so forth.

The main rights of an artist over a work of art include the following:

• copyright grants the artist the right to control the reproduction, distribution, display and modification of the work;
• the right of authorship ensures recognition of the artist’s identity as the creator;
• the right to protect the integrity of the work prevents the work from being distorted or having its reputation harmed;
• the right of exhibition determines the manner and location of the work’s public display;
• the right of reproduction controls the form of reproduction of the work;
• the right of adaptation governs the adaptation of the work;
• the right of distribution involves the sale, rental or lending of the work; and
• the right of performance applies to the public performance of the work of art.

These rights are typically protected by national laws and international conventions, such as the Berne Convention, and artists may transfer some or all of these rights through contracts or licensing agreements.

According to the Copyright Law, for works created by two or more authors in collaboration, the copyright shall be jointly owned by the collaborating authors, and those who have not participated in the creation cannot be considered as collaborating authors.

In principle, copyright over a collaborative work shall be exercised by the collaborating authors through negotiation and agreement. However, in cases where they fail to reach a consensus and there is no justifiable reason to prevent it, any party may exercise, separately, rights other than transfer, exclusive licensing to others or pledge, with the proceeds being reasonably distributed to all collaborating authors. If a collaborative work can be used separately, the authors may separately enjoy copyright in the parts they have created, but in exercising their rights, they shall not infringe upon the overall copyright of the collaborative work.

The aforementioned provisions of the Copyright Law also apply to collective artworks or those created in collaboration between multiple authors.

The legal consequences for violating artwork copyright include civil liability, administrative liability and criminal liability.

• In terms of civil liability, infringers may be required to cease infringement, compensate for losses, apologise and eliminate the adverse effects. Civil litigation procedures such as pre-litigation injunctions and pre-litigation asset preservation measures are also applicable.
• In terms of administrative liability, infringers may face penalties such as warnings, orders to cease infringement, confiscation of illegal gains, confiscation or destruction of infringing copies, and fines. In serious cases, the copyright authorities may also confiscate the materials, tools and equipment primarily used for making infringing copies.
• In terms of criminal liability, infringers may be sentenced to fixed-term imprisonment or criminal detention, and may also be fined concurrently or exclusively.

Copyright automatically arises from the date of creation of a work and does not require registration. The registration of copyright for artworks is voluntary and is handled by the China Copyright Protection Center or provincial copyright bureaus, primarily serving as preliminary evidence of ownership. The registration process involves identifying the registration authority, preparing registration materials (work samples, identification documents, work descriptions, etc), submitting the application, paying the registration fee, and awaiting review. Once the review is approved, the registration authority will issue a “Certificate of Work Registration”, with a typical review period of around 30 working days. Through registration, the copyright owner can obtain preliminary legal proof to further protect their legitimate rights and interests.

The Resale Right (Droit de Suite): Current Status and Challenges in China

The resale right (droit de suite) refers to the right of an artist to receive a percentage of the increased value from the resale of their original artwork. This system was originally established in France to ensure that artists benefit from the market appreciation of their works and has since been adopted by more than 90 countries or regions, including Germany, the United Kingdom and Switzerland.

However, China has not yet formally established the droit de suite system. During the discussions on the third revision of the Copyright Law in 2014, academics conducted in-depth explorations regarding the scope of application, the subjects involved, the methods of calculating proceeds and the management models of the droit de suite, but it was ultimately not included in the revision draft, due to controversies surrounding its necessity, nature and feasibility. Some scholars suggest that, similar to the legislative approach taken for virtual property and data property, the basic framework of the droit de suite could be established in law first, and then gradually implemented through detailed implementation rules, judicial interpretations and other means.

The Future of the Droit de Suite System

In the future, with the development of technologies such as blockchain, smart contracts, NFTs and the metaverse, the information management of artistic assets can be achieved through digital means, simplifying the process of collecting and distributing resale royalties and reducing the operational costs of the system. This will provide technical support for the implementation of the droit de suite system.

Steps to Obtain Permission for Using Copyrighted Artwork Images

To obtain permission for using images of copyrighted artworks, one should typically follow the steps below to ensure legal use.

• Firstly, it is necessary to identify the copyright owner, which may be the artist themselves, their heir or assignee, or they may be contacted through a copyright collective management organisation such as the China Written Works Copyright Society.
• Once communication with the copyright owner is established and permission is granted, both parties must sign a detailed written agreement, clarifying key terms such as the type of rights authorised for use (reproduction rights, information network transmission rights, etc), whether the usage is exclusive, the territorial scope of use, duration, remuneration standards and liability for breach of contract.
• Subsequently, remuneration should be paid according to the agreement and proof of payment should be kept safely.

During use, it is imperative to strictly comply with the terms of the agreement, correctly indicate the source of the work and the copyright owner’s information, and avoid exceeding the scope of the permission or infringing upon the legitimate rights and interests of the copyright owner.

Exemptions from Copyright Permission in Specific Circumstances

It is particularly noteworthy that, according to the Copyright Law, works may be used free of charge without permission in specific circumstances (personal study, news reporting, classroom teaching, etc), but it is essential to indicate the author and the title of the work, and not to impede the normal use of the work nor unreasonably impair the rights and interests of the copyright owner.

When the artist is no longer alive, the right to authenticate their artworks is typically exercised by their heir or legatee. The moral rights in copyright (such as the right of attribution, the right to modify and the right to protect the integrity of the work) are not inheritable but can be protected by the heir or legatee. In contrast, economic rights (such as the right of reproduction and the right of distribution) can be legally inherited within the protection period. In practice, authentication by the artist themselves or their family members is usually considered the most reliable method, especially for the authentication of works by living artists or modern artists, which is widely accepted.

However, some believe that authentication by the artist or their relatives may have conflicts of interest and may not be entirely objective. Once an artistic work enters society, its nature becomes that of a “public good”, and authentication should follow the standards for public goods rather than relying solely on individual judgement. Therefore, the authentication of artworks may require a combination of professional institutions, academic research and judicial procedures to ensure fairness and authority.

Foundations or other entities/individuals authorised to exercise moral rights cannot usually be compelled to include specific artworks in an artist’s complete works collection or issue opinions that favour the authenticity certification of works. This is because moral rights (such as the right of attribution and the right to protect the integrity of the work) are personal in nature and are typically exercised autonomously by the artist or their heir, without mandatory intervention.

However, regarding the authenticity issues in the art market, relevant laws and regulations explicitly prohibit the forgery or alteration of artwork provenance certificates or authentication documents, and require operators of artworks to provide true and complete information about artworks. For instance, the “Pilot Program for Artwork Authentication in Beijing” issued by the Beijing Municipal Culture Bureau proposes to standardise the artwork authentication process through a combination of forensic authentication, artistic authentication and technical authentication, and to develop an artwork information certification system to establish an authoritative artwork archive and certification system.

Therefore, although foundations or related entities cannot be compelled to issue specific opinions, the authentication of artwork authenticity should follow standardised procedures and standards to ensure market transparency and credibility.

When a purchased artwork is identified as a forgery, the buyer can pursue the following civil remedies.

• Rescission of contract: if the seller has engaged in fraudulent behaviour during the transaction (such as deliberately providing false authentication certificates or concealing the true condition of the artwork), the buyer has the right to request rescission of the contract. Upon rescission, the buyer can demand that the seller refund the purchase price and compensate for any losses incurred as a result.
• Claim for compensation for losses: if the seller breaches the contract (for example, by providing an artwork that does not conform to the agreement), the buyer can claim compensation for losses. The scope of compensation includes direct losses (such as the purchase price) and indirect losses (authentication fees, litigation costs, etc).
• Continue performance or take remedial measures: if the buyer still wishes to obtain an authentic artwork, they can require the seller to continue performing the contract or take remedial measures (such as replacing the forgery with a genuine piece).
• Claim for additional compensation: if the seller’s behaviour constitutes fraud, the buyer can claim additional compensation, with the amount being triple the price of the artwork.
• Litigation or arbitration: if negotiation fails, the buyer can file a lawsuit with the people’s court or apply for arbitration in accordance with the contract.

In China, cultural heritage is defined in accordance with the “Notice of the State Council on Strengthening the Protection of Cultural Heritage” as encompassing two major categories:

• tangible cultural heritage; and
• intangible cultural heritage.

Tangible cultural heritage refers to cultural relics with historical, artistic and scientific value, encompassing immovable cultural relics (ancient sites, ancient tombs, ancient buildings, grotto temples, stone inscriptions, murals, etc) and movable cultural relics (important objects, artworks, documents, manuscripts, etc), as well as historic and cultural cities (districts, towns and villages) of outstanding value.

Intangible cultural heritage refers to traditional cultural expressions that exist in a non-material form, including oral traditions, traditional performing arts, folk activities, festive events and rituals, traditional knowledge and practices (such as handicraft skills), and the cultural spaces associated with these expressions.

Both tangible and intangible cultural heritage possess value (historical, artistic, scientific or cultural value), historicity (relevance to specific times and cultural backgrounds), transmissibility (passed down from generation to generation) and irreplaceability (difficult to replicate once destroyed). Cultural heritage is regarded as an important component of the excellent traditional culture of the Chinese nation, carrying the national genes and bloodline, and serving as an irreplaceable precious resource.

In the possession of cultural heritage items, the application of adverse possession exhibits significant particularity. Under common law, adverse possession refers to the acquisition of ownership by a non-owner through continuous, open and peaceful possession of another person’s property for more than the statutory time limit. However, cultural heritage items, particularly cultural relics, are strictly protected under Chinese law.

The “Law of the People’s Republic of China on the Protection of Cultural Relics” clearly stipulates that all cultural relics buried or submerged underground, in inland waters or territorial seas, as well as immovable cultural relics such as ancient cultural sites, ancient tombs, and grotto temples, belong to the state, and their ownership does not change with changes in land ownership or land use rights. Furthermore, the state retains an unlimited right of recourse for cultural relics lost due to theft or illegal export, which is not subject to the limitation of prescription. This implies that even if foreign museums or private collectors attempt to claim ownership of historically lost cultural relics through prescription (as stipulated in the laws of countries such as Japan and Germany), China can still pursue the recovery of these cultural relics in accordance with domestic law and international co-operation. Therefore, the special legal status of cultural heritage items makes it difficult to acquire legal ownership through adverse possession or prescription systems, and the state’s protection of them takes precedence over the application of general property law.

When private individuals discover cultural heritage items, the state possesses the following rights according to the “Law of the People’s Republic of China on the Protection of Cultural Relics”.

• Firstly, all cultural relics buried or submerged underground, in inland waters or territorial seas within the territory of the People’s Republic of China, including ancient cultural sites, ancient tombs, grotto temples, etc, belong to the state. This means that the ownership of cultural relics discovered by private individuals belongs to the state, rather than to the discoverers themselves.
• Secondly, discoverers have an obligation to immediately report to the county-level cultural relics protection department, and relevant departments will organise experts to conduct research and take protective measures.
• In addition, the state has the right to manage and protect cultural relics, and the ownership of state-owned immovable cultural relics does not change with changes in land ownership or land use rights.

The state will commend and reward individuals who promptly report or hand over cultural relics. At the same time, individuals and organisations have an obligation to protect cultural relics in accordance with the law, and violators will bear legal responsibility. These regulations aim to ensure that cultural heritage is properly protected and to prevent the loss or destruction of cultural relics.

Main Clauses

The main clauses in an art sales contract include special provisions such as artwork description, authenticity guarantee, authentication certificate, transfer of ownership and defect disclosure, to ensure the authenticity, legal source and transparency of the artwork’s condition. In addition, the contract covers general clauses such as price, payment method, delivery arrangements, liability for breach of contract and dispute resolution, clarifying the basic framework of the transaction and the rights and obligations of both parties. Due to the particularity of art transactions, the contract usually incorporates detailed identification requirements, proof of provenance, restoration records and other content, and stipulates return and refund mechanisms in the event of discovering forgeries or significant defects, in order to protect the buyer’s rights and interests.

Resale Restriction Clause

A resale restriction clause is also an important element, stipulating that the buyer is prohibited from reselling or consigning the artwork for auction within a certain period (usually three or five years), to control the circulation of the artwork, maintain artist market stability and prevent short-term drastic price fluctuations. These clauses collectively ensure the security and legality of art transactions, both reflecting the specificity of art transactions and adhering to the general principles of sales contracts.

When artworks need to be transferred and sold internationally, the key issues involved encompass laws and regulations, taxation, transportation and insurance, document preparation, payment and currency, transfer of ownership, and language and culture.

• Firstly, it is crucial to comply with the laws and regulations of both the exporting and importing countries, to ensure adherence to export restrictions and import regulations.
• Secondly, taxation issues involve the payment and declaration of customs duties and value-added taxes, and it is necessary to understand the relevant tax policies in advance, in order to avoid additional costs. In terms of transportation and insurance, it is essential to ensure the safety of artworks during transportation and to purchase appropriate insurance to cover potential risks.
• Document preparation includes export licences, authentication certificates and proof of origin, among others, to guarantee the legality and authenticity of the artworks.
• Payment and currency issues involve the security of cross-border payments and exchange rate risks, necessitating the selection of reliable payment methods. The transfer of ownership requires clarification of ownership certificates and the applicability of laws to avoid disputes.
• Lastly, language and cultural differences may affect contract translation and cultural sensitivity, necessitating smooth communication and respect for the cultural backgrounds of both parties.

These issues span multiple dimensions, and buyers and sellers need to make adequate preparations in advance to ensure that transactions are legal, secure and in line with the interests of both parties.

When gallery owners and auction houses sell artworks that involve inauthentic information or plagiarism, they may face the following legal responsibilities.

• Punitive compensation for fraudulent conduct: in cases of fraudulent conduct such as deliberate sales of forgeries, the seller shall bear the responsibility of “refunding triple the purchase price”, and may face additional punitive compensation.
• Liability for infringement of copyright: selling plagiarised artworks may infringe upon the copyright of the original author, requiring the infringer to cease the infringement and compensate for losses.
• Duty of examination and joint liability: if an auction house fails to fulfil its duty of examination or knowingly auctions fake items, it may be deemed negligent or intentionally infringing and bear joint liability.
• Administrative penalties: actions such as concealing the source of artworks or falsifying authentication documents will be subject to administrative penalties, including the confiscation of illegal gains and the imposition of fines.
• Criminal liability: if the conduct constitutes fraud, criminal liability shall also be borne.

Auction houses and galleries must conduct rigorous inspections and verifications before selling artworks, to ensure their authenticity and legality. According to Chinese law, operators of artworks, upon request by the buyer, must provide one of the following proof documents:

• an original proof document approved or issued by the artwork creator themselves;
• a proof document issued by a third-party appraisal and evaluation institution; or
• other documents that can prove the source of the artwork.

In addition, for auction houses, the Auction Law specifically stipulates that the auctioneer has the right to require the consignor to explain the source and defects of the auction items, and to conduct a preliminary appraisal of the auction items and prepare an appraisal record before signing the auction consignment contract. For cultural relic artworks, it is also necessary to submit appraisal opinions issued by professionals in accordance with the requirements of the “Measures for the Examination of Cultural Relic Auction Items” issued by the State Administration of Cultural Heritage.

Establishing a Due Diligence System for Artwork Operators

Therefore, operators of artworks should establish a comprehensive due diligence system, including setting up specialised positions, formulating operational norms and internal supervision mechanisms, to ensure that the provided proof documents are true and valid, and to protect the buyer’s right to know and choose, among other things.

Role of an Art Adviser

An art adviser is an expert who is proficient in both art history and the art market. Their primary responsibility is to provide professional advice and services to collectors, helping them achieve their collection or financing goals. Centred on the collectors’ interests, art advisers offer comprehensive services, including artist investment, artwork purchase, gallery negotiation, auction bidding and recommendations of market experts. By analysing the art market, they provide guidance to clients and help them purchase artworks that best suit their interests and needs within budget. In addition, art advisers leverage their industry connections to help novice buyers overcome purchasing obstacles and even obtain favourable prices from galleries.

Responsibility of an Art Adviser

Meanwhile, art advisers bear significant legal responsibilities and must ensure the authenticity and legality of their advice and services, to avoid breaching contract or tort liability due to recommending forgeries or infringing intellectual property rights. They must also strictly adhere to confidentiality obligations and protect their clients’ privacy and business secrets. Therefore, art advisers need not only to possess professional competence but also to adhere to professional ethics and legal norms, to maintain clients’ trust and the healthy development of the market.

Obligations

When complying with anti-money laundering (AML) regulations, participants in the art market (such as auction houses, galleries and art dealers) are required to conduct customer due diligence. This includes verifying customer identity information, sources of funds and transaction purposes, and identifying ultimate beneficial owners to prevent money laundering activities concealed by shell companies or complex corporate structures.

Simultaneously, participants in the art market should monitor large and suspicious transactions and promptly report them to the AML authorities. They must also properly retain customer identity documents and transaction records to ensure traceability.

Challenges

However, participants in the art market face numerous challenges in fulfilling these obligations, including:

• low market transparency;
• subjective pricing of artworks;
• inadequate technological capabilities;
• the complexity of cross-border transactions; and
• high compliance costs.

To address these challenges, it is necessary to establish internal AML control systems. It is recommended to enhance technological investments (such as introducing artificial intelligence and big data technologies), improve information sharing mechanisms, formulate compliance policies and procedures, and regularly conduct AML training for employees. These measures will ensure effective prevention of money laundering risks and compliance with regulatory requirements.

Legal Protection of Collections as Cultural Heritage: Criteria

Collections in libraries, art museums and other institutions are recognised as cultural heritage and protected, typically based on their historical, artistic, scientific or social value. Specific criteria for recognition include:

• historical value associated with significant historical events or figures;
• artistic value characterised by unique artistic styles or representing artistic achievements of a particular period;
• scientific value containing important scientific information or technological achievements; and
• social value symbolising significance to a specific community or cultural group.

Legal Protection of Collections as Cultural Heritage: Legal Framework

At the international level, relevant legal frameworks include:

• the Convention Concerning the Protection of the World Cultural and Natural Heritage (1972) of the United Nations Educational, Scientific and Cultural Organization (UNESCO);
• the Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property (1970); and
• the Convention for the Safeguarding of the Intangible Cultural Heritage (2003).

At the domestic level, China’s cultural heritage protection is centred around the Law of the People’s Republic of China on the Protection of Cultural Relics, emphasising state leadership and centralised management, and focusing on the historical inheritance, national spirit and social education functions of cultural heritage. These legal frameworks collectively provide a legal basis and practical guidance for the protection of collections as cultural heritage.

The key to determining whether a photograph is considered artistic and protected by copyright lies in whether it exhibits the creator’s personal choices and originality.

As early as 1914, Judge Hand of the United States pointed out that “no photograph, no matter how simple, can escape the influence of the photographer’s personality”, thereby emphasising the presence of personal creativity in the process of taking photographs.

In 1921, scholars of US copyright law further clarified that, even in the case of “snapshots”, the photographer’s choices of subject, composition and timing incorporate elements of individuality, and therefore courts will not deny protection due to a lack of artistic value or sophistication in the photograph.

In China, Article 3 of the Copyright Law enacted in 1990 explicitly listed photographic works as a category of protected works for the first time, stipulating that “works mentioned in this Law include those created in the forms of literature, art, natural science, social science, engineering technology, and other fields, including (4) works of fine arts and photography”. This indicates that a photograph is eligible for copyright protection as long as it is completed through the intellectual labour of the creator and embodies originality, regardless of its artistic level.

The protection of other types of photographs varies across different countries’ laws. In civil law countries, ordinary photographs that do not meet the requirement of originality are typically protected through neighbouring rights. For instance, Germany’s Copyright Law considers ordinary photographs as objects of neighbouring rights, granting them a shorter protection period. Article 128 of Spain’s Intellectual Property Law also stipulates that ordinary photographs lacking originality enjoy exclusive rights to reproduction, distribution and public communication, but the protection period is only 25 years. Italy’s Copyright Law clearly distinguishes between “photographic works of art” and “simple photographs”, with the former being protected under the narrow sense of copyright and the latter being protected through “rights in photographs” under neighbouring rights, enjoying exclusive rights for 20 years.

However, China’s Copyright Law does not include non-original photographs within the scope of neighbouring rights protection like these countries, resulting in ineffective protection for photographs with low originality. In practice, Chinese courts tend to recognise photographs used commercially without authorisation as photographic works for protection, which essentially lowers the requirement for originality in photographic works and aligns with common law practices.

A non-fungible token (NFT) is a digital asset based on blockchain technology. Its core characteristics are uniqueness and irreplaceable nature. The operation of an NFT is akin to a special digital box, where its ownership and transaction history are publicly recorded on the blockchain, providing a foundation of trust for the confirmation of ownership, trading and collection of digital assets.

The metadata of an NFT typically contains information such as its content, ownership and transaction history, and is stored on the blockchain. This decentralised recording method ensures the authenticity and immutability of the NFT.

NFTs initially gained prominence in the field of digital art, marked by the sale of artist Beeple’s work “Every days: The First 5000 Days” for a high price of USD69.3 million, signalling the entry of digital artwork into the mainstream market. Owning an NFT does not imply ownership of the copyright of the original work, but rather possession of the unique certificate of ownership for that digital asset.

Circulation in China

Inauthentic or counterfeit NFTs are not legally allowed to circulate. Although China currently lacks specific laws and regulations governing the circulation of NFTs, relevant provisions of the Civil Code and Copyright Law can be applied to address such issues. For example, using someone else’s work without permission to mint an NFT may infringe upon the original rights holder’s reproduction right, information network transmission right, and even distribution right. Minting an NFT in someone else’s name without authorisation may constitute “making and selling works falsely attributed to another person”, and may violate criminal law in severe cases.

Circulation Internationally

Internationally, the circulation of NFTs is also strictly constrained by intellectual property laws and consumer protection laws. Counterfeit or infringing NFTs are typically prohibited from circulation, and legal liability will be pursued. The first NFT infringement case, involving “Fat Tiger Getting a Vaccine”, was heard by the Hangzhou Internet Court in 2022 and clarified that NFT platforms have an obligation to pre-screen and remove infringing content, otherwise they may bear liability for aiding infringement. Therefore, the minter, buyer and platform all need to be vigilant about infringement risks and ensure the authenticity and legality of the NFT.

The generational transfer of artworks should be conducted within the existing legal framework. For artists and collectors, using inheritance tools such as gifts and wills can achieve a visible transfer of artworks to the next generation. However, for the entire industry and the treasures of art, it is important to consider the cultural inheritance significance from a broader perspective. Gifts and wills have limitations and cannot achieve multi-generational or perpetual inheritance. Trust structures and charitable trusts can assist in achieving iterative inheritance.

The inheritance of artworks involves the legal provisions on inheritance in China’s Civil Code. Inheritance includes statutory inheritance and testamentary inheritance. Statutory inheritance is a legal right granted by law to those who have the right of inheritance, unless the right is forfeited. Testamentary inheritance is inheritance according to the content of a will. A will refers to a legal act whereby a testator, within the scope permitted by law and in accordance with the prescribed manner, personally disposes of his or her estate or other affairs before death. Upon the commencement of inheritance, it shall be handled in accordance with statutory inheritance; where there is a will, it shall be handled in accordance with testamentary inheritance or bequest. Upon the commencement of inheritance, the ownership of artworks with economic value is transferred, but tax issues are not yet involved.

In China, the taxes payable for personal gifts of artworks to individuals mainly include individual income tax, deed tax and stamp tax. For individual income tax, gifts between relatives are exempt from tax, while other gifts are subject to a 20% tax rate. For deed tax, regardless of whether they are a relative or not, the recipient must pay the full amount at a rate of 3%. For stamp tax, regardless of relationship, the full amount must be paid at a rate of 0.05%.

The donation of artworks itself does not directly generate taxes, but it involves tax deductions for donations. For corporate donations of artworks, the portion within 12% of the annual total profit is allowed to be deducted when calculating the taxable income.

Currently, China has not implemented an inheritance tax; therefore, the inheritance of artworks does not involve inheritance tax. However, in some countries or regions, specific types of artworks may be excluded from inheritance tax or gift tax, often with the aim of encouraging the preservation and transmission of cultural heritage. For example:

• cultural heritage or national treasure-level artworks recognised as having significant cultural, historical or artistic value may be exempt from taxes;
• artworks donated to museums, libraries or other non-profit cultural institutions are usually exempt from relevant taxes;
• artworks passed down within families may enjoy tax benefits in some regions to encourage the retention of family cultural heritage; and
• artworks promised for public exhibition or educational use within a certain period may be eligible for tax relief.

Artworks can be established as trust property. According to the Trust Law of the People’s Republic of China, a trust refers to an act whereby the settlor, based on trust in the trustee, entrusts the property rights to the trustee, who manages or disposes of them in the trustee’s own name, according to the settlor’s wishes, for the benefit of the beneficiary or for a specific purpose. The subject of a trust is property rights, and artworks that possess value attributes and are legally considered valuable movable property can legally become trust property.

According to the Trust Law, the purpose of the trust is one of the necessary conditions for establishing a trust, but the purpose must not violate laws or administrative regulations, nor harm public interests. In the context of artwork inheritance, the trust structure with artworks as trust property is a good inheritance tool for realising the cultural and economic value inheritance of artworks. Currently, beneficial attempts have already begun in China, and as long as they do not violate legal provisions, issues of penalties are not yet involved.