Purchase of art and tax exemptions for companies registered in France
Acquisition of artworks from living artists by firms and self-employed
The article 238bis AB of the CGI states that: “companies who buy works from living artists can deduct from the income statement of the acquisition period and on to the next four years, in equal shares, a total which equals the artwork’s purchasing price.” This system allows to deduct each year, for 5 years, 20% of the purchase price of artworks by living artists.
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This tax benefit relies on four criteria:
- Purchased goods must be registered as fixed assets.
- The tax deduction must not exceed 0,5% of the year’s revenues.
- The artwork must be exposed for any of the company’s employee and visitor to see, in an access-free space, for 5 years.
- The company must register on a special reserve account an amount similar to the deducted sum, knowing that this amount will be reintegrated to the taxable results if the artwork is sold or if withdrawal is made on the reserve account.
Purchase of art and tax exemptions for individuals domiciled in France and considered French tax residents
Works of art are not subject to IFI (impôt sur la fortune immobilière) [wealth tax on assets]. Artworks that allow buyers to benefit from tax advantages are listed in article 98 A of the code général des impôts (French Tax Code).