New Royalty Tariff for Auctions

Mexico City, January 20th, 2023

On January 19, 2023 the Ministry of Culture published in the Official Gazette the tariff of royalties applicable to the re-sale of original artworks determined by the Mexican Copyright Office. Under article 92 bis of the Federal Copyright Law, the authors of plastic and photographic works, other than works of applied art, have the right to receive a payment of royalties from the re-sale of their works in a public auction, commercial establishment or with the intervention of a broker. The vendor is constrained to pay these royalties and they cannot be waived. The right to receive such royalties will last for the life of the author and a hundred years afterwards.

At the request of a collective rights management organization, the Mexican Copyright Office determined to establish that these royalties should be calculated at a rate of up to four percent of the price of sale, depending on the price of the sale and without the deduction of the applicable taxes. The rate of the royalties is lower on higher prices, with the lowest one percent rate applying at prices exceeding approximately twenty five thousand US dollars. Further, auction houses and brokers are bound to inform the respective collective rights management organization of the sales they perform within a term of two months. It shall be mentioned that these royalties are applicable only in instances where there is not an agreement in place with the author or the collective rights management organization representing the author. The tariff is not retroactive and does not affect prior agreements with authors or collective rights management organizations.

This tariff will make it substantially easier for collective rights management organizations to collect the royalties owed to their members for the sale of their works, particularly in auctions. However, by inversely linking the rate of the royalty to the price of the sale, there may result in an increase in the prices of such sales.

The copyright department of Basham, Ringe & Correa, S.C. will be very pleased to assist you in determining if these royalties are applicable and their amount.”

 

Juan Carlos Hernández

jhernandez@basham.com.mx

Eduardo Castañeda

ecastaneda@basham.com.mx

Mariana Vargas

mavargas@basham.com.mx

Santiago Zubikarai

sgonzalez@basham.com.mx

Luis Alberto Gonsen

lgonsen@basham.com.mx