Corporate tax benefits of custom art purchases

In France,corporate art purchases can benefit from specific tax advantages, making them an attractive investment. Here are some of the main tax benefits associated with corporate art purchases in France:

1. Tax deduction:
   Companies subject to corporation tax (IS) can deduct the cost of acquiring works of art from their taxable profits. This deduction is subject to certain conditions and limits. In general, the deduction can be spread over five years, at a rate of 20% of the acquisition cost per year. Specific rules apply depending on the value of the work, its location and its integration within the company. It is advisable to consult a chartered accountant or tax advisor for precise information on available tax deductions.
2. Exemption from the contribution économique territoriale (CET) :
   Companies can be exempted from the contribution économique territoriale (CET) on the added value of capital goods, including works of art. This means that the value of the artwork is not taken into account when calculating the CET, which can represent a significant saving for the company.
3. Exemption from property wealth tax (IFI):
   Companies are not subject to the real estate wealth tax (IFI) on the works of art they own. Consequently, the purchase of works of art can help reduce the IFI tax base, if the company is subject to this tax.
4. Accelerated declining-balance depreciation:
   In France, companies can use an accelerated declining-balance depreciation system for capital goods, including works of art. This allows the company to deduct a larger proportion of the acquisition cost of the artwork in the early years of its use, which can have a positive effect on the company’s tax position.

It is important to note that tax benefits may vary depending on the nature and value of the artwork, the company’s tax status and current regulations. It is therefore advisable to consult a tax professional or advisor for precise, up-to-date information on the tax benefits associated with custom art purchases for your company in France, or to consult the French tax authorities’ website.