Tax benefits on the purchase of a work of art
Buying an original work of art offers the company the possibility of a tax deduction on its taxable result for five consecutive years.
From the year of purchase and in each of the following 4 accounting years, the fraction deducted will be of equal value and should never exceed 5 ‰ of the annual turnover.
For example, a turnover of 500,000 euros gives the right to a maximum annual deduction of 2,500 euros. On the basis of an almost linear AC, in 5 years, the tax deduction is equivalent to a work of 12,500 euros.
Tax deductions subject to conditions
That said, The principle of the tax abatement being to encourage artistic creation, all types of works of art are not affected by this advantage. To benefit from the deduction, the work acquired by the company must have been produced by an artist who is still alive.
It must be purchased from the artist himself or from an official market intermediary such as a gallery or an art dealer, or even at a public auction.
The work can be of any kind: painting, sculpture, etc. or for example a musical instrument. In this case, the purchase of a violin for example will open the right to a tax deduction for "purchase of a work of art" on the express condition that the company undertakes to lend the instrument to musicians and performers who would like it without compensation.
Finally, to be able to integrate the work into the assets of your balance sheet, you will have to exhibit it in a place where employees and visitors of the company can see it. So the lobby or meeting room will do the trick, but the CEO's office won't. However, the work can be entrusted for exhibition to a local institution (departmental hotel, Regional Council, town hall, etc.) or a museum. In Bordeaux, the best known is the museum of contemporary art located between Quinconces, Chartrons and the Public Garden, three of the most beautiful areas to invest in real estate in Bordeaux.
Sponsorship, communication medium for the company
It would be a shame for a business to acquire a work of art for the sole purpose of obtaining a tax benefit.
A medium of communication par excellence, art lives when we talk about it and helps its owner to attract attention. Organize an event to present it to your partners and premium customers. Consider devoting space to your sponsorship actions on your brochures and newsletters. Better yet, make it the subject of a nice blog post on the company's website. Sharing well orchestrated on professional social networks will enhance the company and its values.
Corporate sponsorship and clubs, a shared investment
When reading this article, some may regret that their business does not have the cash necessary to purchase a work of contemporary art.
Aware of this difficulty, in particular for very small businesses, a number of clubs and professional groups take care to unite business leaders around sponsorship by offering them joint purchases. This type of operation has several advantages: giving access to art patronage to small businesses by pooling financial participation and facilitating communication around their action.
As we mentioned above, a business club can communicate effectively with local economic and institutional players during meetings and events to be created around the patronage actions of its members. And entrepreneurs know this: targeted meetings are all opportunities to promote your company and its know-how.