Investing in art is first of all a great image vector and enhances the creativity of your company. In terms of investment, purchasing a work of art allows you to benefit from tax advantages such as Rental with Purchase Option or the tax deduction for the acquisition of original works by living artists.

// Lease with Option to Purchase //
The LOA offers you the opportunity to bring art into your offices, to enhance your professional heritage and to capitalize for the future.

The advantages of LOA
– No personal contribution
– The investment is spread over several months in order to spread the costs.
– Rents are considered operating expenses 100% deductible from taxable income.
– For Companies and Corporations subject to Income Tax (IR), relating to industrial and commercial profits (BIC), the deduction of rents as operating expenses is also possible according to the same rules as for companies subject to IS.
– By exercising the purchase option, for 5% of the financed amount you become the owner of the work.

For example, for a work estimated at €10k
Financing:
330€/month over 36 months
250€/month over 48 months

At the end of the contract:
Residual value for personal repurchase of the work: €500
(5% of the financed amount)

Tax deductions for acquisitions of original works by living artists
This practical sheet, from the Maison des Artistes, can help you understand the system and be able to promote its application to your contacts and clients.

Who can benefit from it?
– Companies subject, by operation of law or by option, to corporation tax (IS).
– Individual companies subject to income tax in the BIC category, excluding BNC (Example: a doctor cannot but a medical practice could).
– More generally, it is necessary to be able to enter the price of the work in a special reserve account on the liabilities side of the company's balance sheet.

Terms :
The company must exhibit the work of art and must communicate about the location of the exhibition:
– In a place accessible free of charge to the public or to employees; on the company’s premises (Example: this cannot be a personal office, a personal residence or a place reserved solely for the company’s clients);
– Or during events organized by the company or by a museum, a local authority or a public establishment to which the property has been entrusted or in a museum to which the property is placed on deposit;
– Permanently for 5 years (period corresponding to the year of acquisition and the following 4 years).

// The acquisition of original works by living artists and patronage //
The acquisition of original works by living artists and patronage open up a tax deduction capped according to the most advantageous option for the company:
– Either up to 0.5% of the turnover excluding tax
– or up to €20,000, alternative ceiling
For the purchase of a work of art, the amount of the purchase is deductible from the result of the year of acquisition and over the four years that follow (i.e. spread over 5 years) and this in equal fractions = division of the price of the work by 5.
These 1/5ths are therefore deductible within the limit of 0.5% of the turnover excluding tax or 20,000 euros, depending on the most advantageous option and reduced by the sponsorship actions already carried out during the year.
If the fraction of the purchase price of the work(s) purchased (1/5th) cannot be fully deducted over a year, the unused surplus cannot be carried forward and deducted over the following year; it is lost.
Here are some examples of the application of this measure:

Example 1:
A company achieves a turnover of 5 million euros for year N.
She buys one or more works for an amount of €10,000.
Here it is in its interest to choose the ceiling imposed by 0.5% of net turnover: here 25,000 euros, higher than the alternative ceiling of 20,000 euros.
She can therefore benefit from the full tax deduction: 10,000 euros / 5 = 2,000 euros.
She can therefore deduct 2,000 euros per year over 5 years, up to a maximum of 25,000 euros for year N.

Example 2:
A company achieves a turnover of 200,000 euros for year N.
She buys one or more works for an amount of €10,000.
Here it is in her interest to choose the alternative ceiling of 20,000 euros, higher than the ceiling of 0.5% of her net turnover: here only 1,000 euros.
She can therefore benefit from the full tax deduction: 10,000 euros / 5 = 2,000 euros.
She can therefore deduct 2,000 euros per year over 5 years, up to a maximum of 20,000 euros for year N.

Example 3:
A company achieves a turnover of 200,000 euros for year N.
She buys one or more works for an amount of 10,000 euros and carries out patronage actions for an amount of 18,000 euros.
Here it is in her interest to choose the alternative ceiling of 20,000 euros, higher than the ceiling of 0.5% of her net turnover: here only 1,000 euros.
The company can benefit from the full tax deduction: 10,000 euros / 5 = 2,000 euros + 18,000 euros = 20,000 euros.
She can therefore deduct 2,000 euros per year over 5 years but also benefit from the deduction for her patronage actions for a total of 20,000 euros (18,000 euros + 2,000 euros) over year N.

// Wealth solidarity tax (ISF) //
In accordance with Article 885 I of the General Tax Code (CGI), Works of Art are not subject to ISF. As such, the amounts spent on their acquisition must not appear in the ISF declaration and are therefore not taxable.

Example: An individual has assets of €1,500,000.
If he invests €100,000 in works of art, his taxable assets will be reduced to €1,400,000.
There will ultimately be a tax saving due to its placement in Art.