Defiscalisation 'Have the good sense'
Purchase of works of art which déficalisation for business?
A company acquiring and exhibiting art acquisitions may make tax deductions on income for the year of acquisition and the following four years.
All professionals who have purchased the original artists live and who enrolled in an active account locked works may deduct from income for the year of acquisition and the following 4 years in equal installments, the amount equal to the price acquisition within the limit of 5 per thousand of its net sales.
Against part of the tax deduction, the company must submit to the public on 5 years acquired works. in return for this tax deduction.
When the purchase price of a work is less than 5 000 €, the Minister Delegate for the Budget recognizes that the public exposure condition is satisfied when the work is exhibited in a place "accessible to customers / or employees of the company, excluding home offices. "
• Article 238 bis AB of the tax code from the article 7 of the Law of 23 July 1987 provides that companies acquiring original works by living artists may deduct an amount equal to the price acquisition of the works concerned.
• In the case of purchase of works of living artists, the goal is not to enrich the public collections, but to promote contemporary art, the work remains the owner of the company.
• This deduction is performed by equal installments over five years for the year of acquisition and the next four years may not exceed in respect of each year up to 5 per thousand of sales, less the total deductions referred to in Article 238 bis of the CGI and AA must be assigned to a special reserve account as liabilities in the balance sheet.
• In case of change of assignment or transfer of work or out of the reserve account, the deductions made are immediately reinstated.
• The decision to perform the deduction over the management of the company and is not subject to prior authorization of the administration.
A document conforming to the model must be submitted by the administration for the company that decides to practice this deduction and must be attached to the declaration of results.
• The work is recorded asset. A reserve corresponding to the deductions created in liabilities is réintégrable to taxable income if the work ceases to be exposed to the public or is sold.
• In the case of sale, any surplus on the purchase price will be subject to occupational schemes and benefit gains for sales in excess of two years of reduced tax rates.
• The sale of a work of art acquired in this case a company is subject to VAT at the reduced rate. Section 7 of the Act of 23 July 1987 also provides the ability to create a provision for depreciation of the work where the impairment exceeds the deductions already made.
3 good reasons to reduce taxation of works of art (read this other article)
Extract of the General Tax Code
Art 238a AB
Acquisition of works of art. Companies may deduct from their taxable income the cost of acquiring original works listed in active living artists immobilized provided they remain exposed to the public. This deduction is made in equal installments on the results of the year of acquisition and the next four years for works purchased from 1.1.2002 (or nine or nineteen years following the other in works that they were acquired on or after 1.1.1994 or before this date).
A deduction in respect of each financial year, enrolled in a special reserve account may not exceed the limit of 5 per thousand of sales, less the total of all other deductions under patronage.
A company with a turnover of EUR 200 000 6000 euros acquires original works by living artists.
The maximum deduction is equal to 200 000 X 5 ° / oo = 1000 euros.The tax deduction: 6000 X 1/5 = 1200 euros is limited to 1,000 euros (200 being lost).
On a taxable income of 10,000 euros, the company will deduct 1000 or 9000 euros subject to tax.
The amount held in reserve will be 1000 euros.
The withdrawal of public exposure, the assignment of the work or the removal of the special reserve will generate the imposition of the reserve.
Finally, a special form of sponsorship expenditure tracking to be attached to the statement of income for the company.
Moreover, the works of art referred are not subject to trade tax (art. 1469 of the Code)