French companies acquiring an original work of art before December 31, 2025 can deduct the purchase price from their taxable income. To benefit from this tax incentive, the company must meet certain prerequisites.
Who is eligible for tax relief?
The tax deduction for the acquisition of a work of art is available to companies subject to corporate income tax by right (automatically) or by option, as well as to companies and individual entrepreneurs subject to income tax in the BIC category, with the exception of BNC.
Which works are concerned?
The tax deduction applies to the purchase oforiginal works entirely executed by the artist’s hand.
What conditions must be met?
To benefit from the tax deduction, the company must meet a number of conditions.
1/ Live artist
The artist must be alive at the time the work is acquired. It is up to the company to prove the existence of the artist at the acquisition date.
2/ Exhibiting the work
The company must exhibit the work of art in a place accessible free of charge to the public or employees, for a period of 5 years. This period covers the fiscal year in which the work was acquired and the following four years.
It is important to note that exposure must be continuous over the required 5 years, and cannot be occasional. The work can be exhibited on company premises, in a museum, in a public institution or at events organized by the company or other entities. However, it must not be placed in an area reserved for a single person or a restricted group, and the public must be informed of the location of the exhibition and the possibility of access.
3/ Accounting obligations
The company has two accounting obligations: to record the work as a fixed asset in its accounts, and to allocate the amount of tax deductions to a special reserve account on the liabilities side of the balance sheet. A document on the constitution of this reserve must be attached to the income tax return, in accordance with the model issued by the tax authorities.
How and how much?
The acquisition of original works by living artists or sponsorship allows a tax deduction capped at the most advantageous option for the company:
- Or 0.5% of sales excluding tax.
- The alternative ceiling is €20,000.
The purchase price is deductible from income in the year of acquisition and the following four years, i.e. spread over 5 years, in equal fractions (division of the price of the work by 5). These 1/5ths are deductible up to a limit of 0.5% of sales excluding tax or 20,000 euros, depending on which option is more advantageous, and are reduced by the amount of sponsorship actions already carried out during the year. If the fraction of the purchase price (1/5th) cannot be fully deducted in any one year, the unused surplus cannot be carried forward and is lost.
