Tax advantages of investing in Art

Posted by Florian Azzopardi on

Note: this article is related to French law, and might not be relevant for other countries.

Purchasing art has many advantages for both individuals and companies.

For individuals:

  • Tax on capital gains:
    • No tax for sales below 5,000 euros.
    • For sales above 5,000 euros, two options:
      • Flat-rate 6.5% tax on sales price. Beneficial option for short detention period and high capital gains (also applicable if the owner has lost the invoice).
      • Capital gains 19% taxation plus social security payment. The fiscal benefit is a 5% yearly tax liability starting from the third years of detention, so a complete exemption after 22 years.
  • Law of succession:
    • Artworks can be included in the 5% furniture package. These artworks will then be submitted to the succession taxation, which can be more advantageous than capital gains taxation in case of sale.

For companies:

  • Income taxes deduction:
    • Companies investing in artworks can register them as fixed assets and deduct the acquisition price from the calculation of the taxable result. This deduction is equally spread on the acquisition year and the four following years (20% / year). This deduction is capped by 0.5% of the company’s income and is possible only if the artwork is exposed to public (for instance in the company’s office).
  • Tax on capital gains:
    • Same as for individuals.