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  • Writer's pictureLu Tenorio

Tax exemption for works of ART and how to buy works of art for your business

Combining professional efficiency and visual pleasure, who has never nourished this dream? Some companies have allowed themselves this luxury by beautifying their workspaces with stunning works of art!

Putting works of art in your professional premises is an innovative way of promoting communication with both employees and customers, while making your offices more pleasant. With this action in favor of artists, to improve the daily lives of your employees and while giving you an image as patrons to your customers, you reduce the amount of your taxable income. The acquisition of works of art by companies can in fact give rise to tax advantages, under certain conditions.

ART and income tax

The tax exemption for works of art is not reserved for individuals, on the contrary, it is even a practice favored by businesses. For individuals, the advantage mainly comes into play at the time of resale. As for companies purchasing one or more works of art, they have the possibility of deducting them from their taxable income in fractions of equal value. This process can be carried out from the first year of purchase, then for the following four years.

Conditions for purchasing artwork for your business

  • Buy works of contemporary art and living artists

Only contemporary works are taken into account in this tax system. Indeed, the artist must be alive at the time of purchasing the work.

  • Exhibit your works in a public place

For a minimum of 5 years, i.e. the amortization period of the work concerned by the leasing, it must be exhibited in places accessible to public, welcoming company staff, customers and collaborators. In short, it cannot be placed in a private office or in a place reserved only for the company's clients, for example.

  • Register the works on the company's balance sheet

The deduction system requires being able to enter the deductible acquisition price on the company balance sheet. On the other hand, works cannot be purchased to be resold quickly. In fact, they must be immobilized in the company's accounts. They will therefore be deducted by equal fraction each year for 5 years (within the limit of 0.5% of turnover).

Integrate works of art into the company’s balance sheet

The acquisition price of a work of art can therefore be deducted extra-accountably from the taxable income of the year of acquisition and the following four years, by equal fractions, i.e. 1/5th per year .

How is the deduction base composed?

It brings together the cost price of the work, corresponding to the original value, that is to say its purchase price, to which any incidental costs are added, before subtracting the recoverable VAT.

Any acquisition costs which are not included in the cost price are excluded from the basis of the deduction and immediately deductible. For example, this could be a commission paid to an art dealer.

If the fraction of the acquisition price cannot be completely deducted for a year, the unused surplus cannot be carried forward to be subtracted to a following year. The work of art must be registered in a fixed asset account. Thus, at the time of allocation of the result on the occasion of the Annual Ordinary General Meeting, a fraction of the result must be allocated to a special reserve account for the 5 years during which the company benefits from this tax deduction.

Buying art for a business is therefore not trivial, and it is an excellent way to combine business with pleasure: benefit from deductions taxes while enjoying a work of art that beautifies the premises, and finally, participating in the promotion of artists. So, by what type of Are you tempted to beautify your offices? request the catalog here:

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