Tax exemption through investment in art is an advantageous solution for companies wishing to support the artistic world while benefiting from a tax advantage. Indeed, the acquisition of works of contemporary art can allow companies to reduce their corporation tax (IS) while enhancing their artistic heritage.
The tax benefits of investing in art
Companies that invest in art can benefit from a tax reduction. This tax reduction is equal to the amount invested, spread over five years. The amount of the tax reduction must not exceed 5‰ of the company's turnover excluding tax.
To benefit from this tax advantage, companies must meet certain conditions. First, the work must be created by a living artist. Then, it must be considered as a work of art within the meaning of article 98 A of the general tax code. Works of art can be paintings, sculptures, drawings, prints, photographs or installations.
Finally, the work must be exhibited to the public or made available to the public in a place accessible to the public, such as a museum or an art gallery. Companies can thus buy works of art and display them on their premises or lend them to museums or exhibitions.
The benefits of investing in art
Investing in art has several advantages for businesses. First of all, it allows to support the artistic world and to participate in the promotion of culture. Art increases the value of heritage and contributes to the value of a company.
In addition, works of art can be considered as a fixed asset, that is, real estate intended to be used in a durable way. Investing in art therefore has a positive impact on the company's balance sheet.
Finally, investing in art can be a way to diversify a company's investments. Indeed, works of art represent an attractive alternative to traditional financial investments.
The management of works of art
The management of works of art is an important aspect for companies that invest in art. Indeed, the works must be kept in optimal conditions to preserve their value and quality.
Companies must therefore provide suitable means of storage, such as special boxes or air-conditioned spaces. They must also provide secure means of transport for the works of art, in order to avoid the risk of theft or damage.
It is possible to participate in the promotion of culture by making works of art available to the public during exhibitions and fairs made by the company . These exhibitions can be organized on the premises of the company or in public places, which makes it possible to increase the visibility of the company while contributing to the dissemination of culture.
Investing in art can be an interesting solution for companies wishing to benefit from a tax advantage while participating in the promotion of culture. The tax benefits associated with investing in art allow companies to reduce their corporation tax, while enhancing their artistic heritage.
It remains important for these companies to be aware of the obligations related to the management of works of art and to provide suitable means for preserving, transporting and promoting the works. Businesses should also be aware of the risks associated with investing in art and ensure the quality of works before acquiring them.
The right methods
We suggest that you consult the government website which explains the conditions to be respected in order to apply this system within your company.
You can also go to your accountant or a wealth advisor to advise you on the application of this system.
Finally, do not hesitate to contact us for support in your investment project.