How does the tax exemption of a work of art work?

Art enthusiasts or not, can take advantage of the tax advantages linked to the acquisition of a work of art. Indeed, investing in art allows you to diversify your assets and save taxes. In addition, a work of art can prove to be a profitable investment for which you can realize a nice capital gain on resale.

Thus, the acquisition of a work of art allows you to benefit from the following tax advantages:

  • For individuals: A work of art is not subject to the IFI (tax on real estate wealth) and it is taxed only in the event of resale.
  • For companies subject to IS (corporate tax): By buying a work of art, a company can deduct 1/5 of the purchase price excluding tax for 5 years, limited to a ceiling and under conditions.

But we explain in detail a little further on the tax advantages for an individual and a company!

Which works of art qualify for tax exemption?

The works of art that allow you to benefit from tax advantages, in accordance with article 98 A of the general tax code , are the following:

  • Paintings, canvases, paintings, artist's photos;
  • Carpets and tapestries;
  • Engravings;
  • statues, sculptures 

What conditions must be met to exempt the acquisition of works of art from tax?

In order to benefit from a tax exemption for a work of art, certain conditions must be met, especially for companies.

First of all, companies and individuals must have a purchase invoice for the work. This certificate serves as tax proof and contains the following information:

  • The origin of the work
  • The amount and date of acquisition.

Without this invoice, you cannot benefit from the tax advantage. Likewise, this certificate allows you to insure your work of art.

As far as companies are concerned, only the following companies are concerned by the tax exemption scheme for a work of art:

  • Companies subject to IS (corporate tax),
  • Sole proprietorships subject to IR in the category of BIC (industrial and commercial profits)

Thus, to benefit from the tax advantages, they must meet the following conditions:

  • Acquiring an original work by a living artist: The company must be able to prove the existence of the artist on the date of acquisition of the work.
  • Exhibit the work of art: In order to be able to exempt its purchase from tax, the company must exhibit the work of art permanently for 5 years. The exhibition may take place on company premises provided they are accessible to the public or to employees, or in a museum. Indeed, the work cannot be exhibited in a personal office, or a place reserved solely for the company's customers. In this case, the tax deduction is not granted.