For those who think art is for the elite and expensive, think again. Whatever the size of your business, you can surround yourself with original works by living artists at reduced cost.

The purchase of works of art is within the reach of all companies:

In France, since 1985, companies can deduct their purchases of works of art from their taxable profits.

If for your business you want:

• Boost your image by SPONSORING A LIVING ARTIST

• Embellish your premises: reception hall, offices, or even shop window

• Find an original communication

• Or just make you happy

Think about the TAXATION !

PURCHASE OF WORKS OF ART

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A company that invests in art and exhibits its acquisitions can make tax deductions on the result of the acquisition year. Indeed, a company having bought original works of living artists and having registered them in an account of fixed assets, can deduct from the result of the year of acquisition and the 4 following years, in equal fractions, an equal sum at the acquisition price within the limit of 5 per thousand of its turnover excluding tax. In return for this tax deduction, the company must present the acquired works to the public over 5 years. For works whose purchase price is less than € 5,000 excluding tax, the Minister Delegate for the Budget admits that the condition of public exposure is satisfied as soon as the work is exhibited in a place "accessible to customers and / or to customers. company employees, excluding personal offices ”.

Extract from the corresponding General Tax Code: Art 238 bis AB:

ACQUISITION OF WORKS OF ART:

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Companies may deduct from their taxable income the cost of acquiring original works by living artists recorded as fixed assets, provided that they remain exposed to the public. This deduction is made in equal fractions over the results of the financial year of acquisition and the following four years for works purchased from 1.1.2002 (or the following nine or nineteen years for other works depending on whether they were acquired from 1.1.1994 or before that date).

The deduction made for each financial year, entered in a special reserve account, cannot exceed the limit of 0.5% of turnover, less the total of other deductions made for sponsorship ...

Example :

A company has a turnover of € 1,000,000. It can acquire at most works by living artists for 0.5% of its turnover excluding tax, ie: 0.5% X € 1,000,000 = € 5,000.

The maximum deduction limit is: 20% X € 5,000 = € 1,000 each year for 5 years.

The company deducts € 1,000 from its taxable income each year for 5 years. If this company is taxed at 50%, it “saves”: 50% X € 1,000 = € 500 in Company Tax for 5 years. (ie, 5 X 500 € = 2,500 € over 5 years which corresponds to half of the cost of acquiring the works).

Art and tax exemption: The rental of works of art for businesses

What are the tax advantages that can benefit companies by renting a work of art?

The rules imposed by the tax administration on businesses are less restrictive in the case of the rental of works of art than in the case of the purchase of works of art.

Art and tax exemption: Rental with option to purchase (LOA) or leasing

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Leasing with an option to purchase works of art (or leasing of works of art) allows a company to rent a work of art for a given period, with the possibility, at the end of the rental contract, of 'buy the work of art for a price determined in advance. Thus, the company that exercises the option to purchase becomes the owner of the work of art.

It should be noted that a natural person can become the owner of a work of art at the end of a rental with option to purchase contracted by a company. A member of the staff of a company can in this way become the owner of a work by exercising himself the option of purchase which, very often, represents a residual value. An employee, a shareholder or a manager, can have the company finance, for himself, at a lower cost, a work of art, while benefiting during the rental period of the work from the deductions of charges set out below. below.

Art and tax exemption: expense deductions for companies

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All the rents paid by the company under the contract for the rental of works of art are recognized as expenses deductible from the company's net profit in accordance with Article 39-1-1 ° of the CGI. The rent for a work of art for hire is therefore deducted from the corporate tax base.

Art and tax exemption: The conditions for the rental of works of art

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Contrary to the rules governing the purchase of works of art for companies within the framework of art patronage, to benefit from tax arrangements when renting works of art:

・ You can rent artwork from living or non-living artists  

・ There is no tax exemption cap  

Art and tax exemption: The conditions of exhibition of the rented work of art

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As when it comes to benefiting from favorable taxation when purchasing works of art, the company must exhibit, during the rental period, the work of art in an accessible place either at public, or to employees (reception hall, meeting room, company restaurant, shared or common spaces).

Art and tax exemption: Beneficiary companies

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Companies benefiting from the tax deduction system must be subject either to corporation tax (SA, SAS, SARL) or to income tax in the category of industrial and commercial profits BIC (SNC).

NB: Companies subject to income tax in the BNC category cannot benefit from the tax deductions mentioned above. This concerns, for example, the liberal professions (doctors, lawyers, etc.).

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