A French tax scheme for eligible businesses in France
Under French tax law, the purchase of an original work of art may allow certain eligible businesses in France to benefit from a specific tax deduction, while supporting contemporary artistic creation.
This scheme is provided for under Article 238 bis AB of the French General Tax Code (Code général des impôts) and applies, subject to the conditions laid down by French law, to qualifying original works by living artists acquired before 31 December 2028.
This is a French tax scheme. It does not automatically apply to businesses established or taxed outside France.
Which businesses may qualify?
The scheme is available in particular to businesses subject to French corporate income tax (impôt sur les sociétés), as well as certain businesses subject to French income tax under the industrial and commercial profits (BIC – bénéfices industriels et commerciaux) regime, provided that all applicable conditions are met.
Businesses taxed under the French non-commercial profits (BNC – bénéfices non commerciaux) regime are excluded from this scheme.
Which works of art qualify?
The deduction applies to the acquisition of original works of art by living artists that meet the definition of works of art under French tax law.
The artist must be alive at the time the work is purchased.
The business must be able to demonstrate that the conditions required under French law to benefit from the scheme have been met.
What conditions must be met?
1. Purchase an original work by a living artist
The work must qualify as an original work of art under French tax regulations, and its creator must be alive at the time of purchase.
2. Display the work
To qualify for the deduction, the business must display the work free of charge in a place accessible to the public or to employees, excluding their individual offices.
This requirement applies during the financial year in which the work is purchased and for the following four financial years.
The work may, for example, be displayed on business premises accessible to employees or the public, or entrusted to a museum, local authority or public institution under the conditions provided for by French law.
The display must not be restricted to a single person or a limited group of people.
3. Comply with accounting requirements
The artwork must be recorded as a fixed asset in the company’s accounts.
An amount equal to the deduction claimed must also be allocated to a special reserve account on the liabilities side of the balance sheet, in accordance with the applicable French accounting and tax rules.
Businesses should ask their accountant to confirm the appropriate accounting treatment.
How does the tax deduction work?
The purchase price of the artwork is deducted from the company’s taxable income in equal instalments over five financial years:
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the financial year in which the artwork is purchased;
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followed by the next four financial years.
In principle, the annual deduction therefore corresponds to one fifth of the purchase price of the artwork.
Example
For an artwork purchased for €1,000, the deduction would in principle be spread as follows:
€1,000 ÷ 5 = €200 per financial year for 5 financial years.
This is a deduction from taxable income. It is not a €1,000 tax refund or a €1,000 reduction in the amount of tax payable.
What is the deduction limit?
For each financial year, the deduction is subject to the limit provided for under Article 238 bis of the French General Tax Code.
The applicable limit is €20,000 or 5‰ (0.5%) of annual turnover excluding VAT, whichever is higher.
Any qualifying corporate sponsorship or charitable contributions made under Article 238 bis must also be taken into account when calculating this limit.
If the annual portion of the artwork’s purchase price cannot be fully deducted because the applicable limit has been reached, the unused portion of this specific deduction cannot be carried forward to a subsequent financial year.
An artistic investment for your business
Purchasing an original linocut allows a business to add an original work of art to its assets while directly supporting the work of a living artist.
The artwork can also contribute to creating a distinctive working environment in areas accessible to employees or the public, provided that the display requirements of the French tax scheme are respected.
Important – French tax law
This tax deduction is provided for under French law and is intended for businesses that meet the eligibility requirements of the French tax system.
The information on this page is provided for general information purposes only and does not constitute tax, accounting or legal advice.
Eligibility for the scheme and the amount that may actually be deducted depend on the individual circumstances and tax status of each business.
Businesses established or taxed outside France should not assume that this French tax deduction applies to them and should seek advice regarding any tax incentives that may be available under the laws of their own country.
Before purchasing an artwork with the intention of claiming this French tax deduction, we recommend that businesses consult their accountant or tax adviser to confirm their eligibility and the applicable accounting and tax treatment.
