To find out whether you qualify for any tax benefits, please contact your tax office.
Purchasing a work of art tax-free
Enhance your space and save on taxes!
Whether you’re an individual or a professional, art can be a real asset in your life. Acquiring a work of art not only enhances your living or working space, but also optimizes your tax situation.
Discover how to combine passion and taxation by investing in art. Whether you want to decorate your home, add value to your business or simply support artistic creation, find out how you can benefit from the advantages of tax exemption.
For companies
Companies subject to corporate income tax (Impôt sur les Sociétés), as well as businesses and individual entrepreneurs subject to income tax (Impôt sur le Revenu) in the BIC category, can benefit from a tax reduction when purchasing a work of art under certain conditions:
Who can benefit from the discount?
- Companies subject to corporate income tax
- Companies and sole traders subject to BIC income tax
Which works are concerned?
Original works entirely executed by the artist’s hand:
- Production in all materials of statuary art or sculpture and assembly
- Cast sculpture limited to 8 copies, controlled by the artist or his assigns
- One-of-a-kind ceramics, signed by the artist
Manufactured objects made by artisans or industrialists are not original works of art.
Please note: works purchased with a view to resale and included in the company’s inventory are not eligible for the deduction.
How can I benefit from the deduction?
- Exhibit the work of art in a location accessible free of charge to the public or employees (with the exception of the company’s offices) for a continuous period of 5 years. It cannot be limited to one-off events (temporary exhibitions, seasonal festivals, etc.).
seasonal festival…). The public must be informed of the location of the exhibition and the possibility of access to the goods. The company must therefore provide the appropriate information to the public. - Two accounting obligations to be met by the company:
- Record the work as a fixed asset in its accounts
- Allocate the amount of tax deductions to a special reserve account on the liabilities side of the balance sheet.
How is the deduction applied?
- The basis for the deduction is the purchase price of the work, excluding VAT, plus any ancillary costs (e.g. transport of the work). Expenses not included in the acquisition price (e.g. commission paid to an art dealer) are excluded from the deduction base and are immediately deductible. Amounts are deductible up to a limit of €20,000 or 5‰ of the company’s sales excluding VAT.
- The tax deduction is spread over 5 years (year of acquisition and the following 4 years) in equal fractions: each year at 1/5th (20%) of the cost price of the work.Please note: the tax reduction cannot be recovered. Any deduction not taken by the company in a given year is lost forever.
Can the deduction be challenged?
Yes, in which case the amount deducted must be added back to taxable income on an extra-accounting basis.
The cases in which this may be called into question are as follows:
- Change of use: the work is no longer exhibited to the public
- Sale of the work: the asset is no longer part of the fixed assets.
- Withdrawal from the reserve account: the withdrawal of all or part of the sums reserve account, the sums withdrawn are added back to taxable profits at the standard rate.
Renting out works of art is another way to save tax.
A company can rent a work of art under the same conditions as a purchase, and the total rent paid for the rental of the work is booked as an expense deductible from net profit, and therefore deducted from corporate income tax.
Article 39-1 of the French General Tax Code allows rents to be considered as a fully deductible expense under account 613 of the general chart of accounts (furniture rental), or line 16 of declaration n°2035-A for the liberal professions, provided that the work is exhibited to customers and/or staff. The cost must be “reasonable” and the work must contribute to enhancing the company’s internal and external image.
To find out whether you qualify for any tax benefits, please contact your tax office.
For private customers
Private customers who purchase a work of art can also benefit from tax advantages.
Which works are concerned?
Original works entirely executed by the artist (photos, paintings, sculptures, precious furniture, etc.) up to a limit of 8 copies for sculptures.
The work must be sold with an invoice or certificate stating the origin of the work, the amount and the date of acquisition.
What are the tax benefits?
- The purchase of a work of art is not included in the declaration of the Impôt sur la Fortune Immobilière (IFI).
- Donating a work of art to a museum or public-interest organization entitles you to a 66% tax reduction, limited to 20% of your taxable income. This tax reduction can be spread over 5 years.
- Reselling a work of art qualifies for capital gains tax exemption if the work has been kept for more than 12 years, in which case the private individual will not be subject to capital gains tax.
Please note: the sale of a work of art or antiques by an individual or an association, for a sum in excess of €5,000, gives rise to a flat-rate tax on precious objects, amounting to 6% of the price of the item.
In the event of inheritance?
- Works of art have a special place in tax law. In particular, there are 2 special cases:
- The heir may be exempt from inheritance tax if he decides to donate the works of art to the State. However, if he so wishes, he may retain the use of these works of art for the rest of his life.
- The principle of dation of payment. This option gives the heir the possibility of pay inheritance tax to the tax authorities “in kind”. In other words, by making a donation works of art and collectors’ items to the State.
- When inheriting an estate that includes works of art, the notion of “meubles meublants” is important. Furnishings are “furniture intended for the use and decoration of apartments”. Furniture, tapestries and porcelain are all considered furnishings. As are statues and paintings, all of which are part of the home.
They can therefore be included in the 5% lump-sum, and inheritance tax on these items will be set at 5% of their value.
