“Tax exemption through works of art: a PR tool”

The acquisition of a work of art gives a company a dynamic, effective image, with extremely positive results. The presence of a work of art brings creativity and well-being into the company and has a positive impact on relations with visitors.

A special deduction is permitted to companies that purchase original works by living artists to exhibit them to the general public. Irrespective of the company’s business, the deduction concerns:
– Companies subject, as of right or optionally, to Corporation Tax,
– Individual companies subject to income tax in the BIC category – Industrial and Commercial Profits.
Works purchased with the intention of selling them on do not entitle the buyer to the deduction.



Henry Moore / 2 Pieces Reclining Figure: Cut / crédit photo Klaus Stöber. Tous droits réservés

Terms and conditions to take advantage of the deduction

•Subject to the deduction are original works by artists living at the time of the purchase.
•The company must exhibit the work of art in a place freely accessible to the general public or to employees, with the exception of their offices, for 5 years.


How to make the deduction?

The acquisition price of the work of art can be deducted in a manner not reflected in the accounts from taxable income earned in the tax year of acquisition and the subsequent 4 years, in equal fractions (i.e. one fifth each year).

The deduction base is formed by the cost price of the work (i.e. its purchase price, plus any accessory expenses and minus the recoverable VAT). The costs incurred on acquisition, which are not included in its cost price (particularly the commissions paid out to middlemen), are excluded from the deduction base; they can be deducted immediately.
The deduction thus made in respect of each tax year is capped: it may not exceed the limit of 5‰ (perthousand) of the turnover excluding tax, less the total of payments made in respect of patronage.

For companies subject to corporation tax or income tax in respect of BICs, the sums must be deducted from income in the tax year:
– On table no. 2058-A (Cerfa no. 10951), line XG, when the company falls under the non-presumptive (real) tax regime.
– On table no. 2033-B (Cerfa no. 10957) when the company is placed under the simplified taxation system.

The company must enter a sum equal to the deduction in a special reserve account, shown under liabilities in the financial statement. That sum must be reintegrated in a manner not reflected in the accounts in the taxable income in the event of:
– Change of use (the work is no longer on show to the general public or the instrument is no longer loaned);
– Disposal of the work or instrument (the asset is taken out of fixed assets);
– Withdrawal from the reserve account (the withdrawal of all or part of the sums allocated to the special reserve account entails a reintegration of the sums withdrawn into the taxable profits at the common law rate).



Numerous aspects will be brought up in the talks:
> How to register an acquisition from a gallery within the framework of the patronage system ?
> How to make the choice between works and artists ?
> How to adapt strategy to budget ?
All questions to which the speakers with provide answers.Enrolment by email: dbenelhabbes@strasbourg-events.com


Crédit photo Magellan