The tax deduction for the purchase of a work of art is available to the following companies:

• Businesses subject to business tax —As of right (automatically) or on option
• Businesses and sole proprietors subject to income tax in the BIC: titleContent

The tax deduction applies to the purchase oforiginal works and entirely executed by the hand of the artist :

• Table, painting, drawing, watercolor, gouache, pastel, monotype
• Etching, stamp and lithography, drawn in limited number directly from boards. The technique or the material used is not important, with the exception of any mechanical or photomechanical process
• Production in all materials of statuary art or the sculpture and assembly
• Sculpture cast iron limited to 8 copies and controlled by the artist or his assigns
• Tapestry handmade, based on original cartons provided by the artist, limited to 8 copies
• Unique copy of ceramic, signed by the artist
• Enamel on copper, up to a limit of 8 numbered copies and bearing the signature of the artist
• Photography taken by the artist, drawn by him or under his control, signed and numbered up to 30 copies, all formats and supports.

However, manufactured goods manufactured by craftsmen or industrialists craftsmen or craftsmen are not original works. Similarly, jewelry, goldsmiths' and jewelry are excluded from the scheme.

In order to benefit from the tax deduction, the company must ensure that several conditions are filled.

Artist still alive

The artist must be living at the time of purchase of the work. It is up to the company to prove the artist's existence at the date of acquisition.

Exhibition of the work

The company must have the work of art exhibited in a place accessible free of charge to the public or employees (except its offices).

The duration of the exposure shall be 5 years. This period corresponds to the accounting year in which the work was acquired and to the following four years.

Concretely, the exhibition of the work can be carried out in different ways:

• In the company premises, provided that they are effectively accessible to the public or to employees
• In a museum to which the property is deposited
• In a public establishment of a scientific, cultural or professional nature e.g. universities, colleges, national polytechnic institutes
• During protests organized by the company or by a museum, a local authority or a public institution to which the property has been entrusted

On the other hand, the work must not be placed in a room reserved for one person only or a small group of people.

Whatever the conditions of exposure to the public adopted by the company, the public must be informed the place of exhibition and its possibility of access to the property. The company must therefore communicate the appropriate information to the public.

She has to do it by attractive indications at the exhibition venue and by all promotional means adapted to the importance of the work.

Accounting obligations

The company must respect 2 accounting obligations :

• Save artwork in immobilization in his accounts
• Assign the tax deduction amount to a special reserve account, listed in indebted of the balance sheet. The company must attach to its income statement a document concerning the constitution of this reserve, in accordance with the template presented by the tax administration.

Special reserve established pursuant to Article 238a AB of the General Tax Code

The basis of deduction is purchaser's price excluding tax of the work, plus any incidental costs (e.g. transport of the work). On the other hand, costs which are not included in the purchase price (e.g. commission paid to an art dealer) are excluded from the basis of the deduction. These are immediately deductible.

Implementing rules

The tax deduction is spread over 5 years (year of acquisition and subsequent 4 years) in equal fractions. Thus, it is equal every year to 1/5^e (20%) of the cost price of the work. If the acquisition is made in the course of the year, the deduction is not reduced pro rata temporis.

The sums are deducted from the profit or loss for the financial year, according to the tax system of the company:

• Normal Actual Speed : on Table No. 2058-A line XG (cerfa no. 15949)
• Simplified system of taxation : on table 2033-B (cerfa no. 15948)

Limitation of deduction

The sums are deductible up to €20,000 or 5% of turnover excluding company tax where the latter amount is higher. This annual ceiling shall be reduced by the payments made under the patronage.

If the proportion of the purchase price cannot be fully deducted in respect of a year, the unused surplus is lost. It cannot be carried forward to be deducted in a subsequent year.

The tax advantage granted to the company may be questioned. Therefore, the amount deducted must be reinstated to taxable profit extra-accountancy.

The cases of challenge are as follows:

• Change of assignment : The work is no longer on public display
• Transfer of the work : the good comes out of thefixed assets, due to a sale or donation
• Withdrawal from the reserve account : the withdrawal of all or part of the sums allocated to the special reserve account leads to the reintegration of the sums withdrawn into the profits taxable at the ordinary rate