INVEST IN ART FOR TAX ADVANTAGES!
FOR BUSINESSES, TAX MEASURES IN FAVOUR OF LIVING ARTISTS:
Companies can deduct from their taxable income (see the official text below) the purchase of original works by living artists. The obligation to exhibit these works of art to the public is limited to the depreciation period of the property (5 years). The original works of living artists are also excluded from the CFE’s plate.
Extract from the corresponding General Tax Code: Art 238 bis AB:
Corporations may deduct from their taxable income the acquisition cost of original works of living artists recorded in fixed assets provided they remain on display to the public. This deduction is made in equal fractions on the results of the year of acquisition and the following four years for works purchased on or after 1.1.2002 (or nine or nineteen years for other works following that on or before 1.1.1994).
The deduction made in respect of each financial year, entered in a special reserve account, may not exceed the limit of 5 p. mile of turnover, less the total of all other deductions made in respect of patronage…
Example: your company has a turnover of 100 000€.
At a rate of 0.5%, you will benefit from €2,500 for the purchase of one or more works of art. Spend 500€ of purchases per year for 5 years. This will reduce the result of your annual turnover and therefore your tax.
The tax deduction for each fiscal year, in equal fractions, may not exceed 0.5% of your company’s turnover.
Record this purchase as an expense (on a special reserve account) in your annual results. The deduction will be 20% of the purchase price of the work for 5 years.
Exhibit the work for 5 years (the amortization period of the work) in a location accessible to employees, customers or suppliers of the company, excluding individual offices. Works must be created by living artists.