TAXATION


Buying a work of art has a tax advantages for companies and also for individuals.

Indeed, for a heavily taxed individual, the acquisition of a work of art allows Wealth Tax reductions. The amount of the work is deducted using specific Wealth Tax calculations.

In addition to reducing the Wealth Tax, taxpayers can receive significant advantages in terms of the capital gains because they can choose between a tax on capital gains of around 5% of past value or normal taxation of 27% enjoying a 10% reduction each year, after two years possession of the work and a total exemption after 12 years.

The concept of Fine Art Capital is to offer the purchase of collectables in joint ownership, or to sell collectables using our experience and expertise in appraisals.

Tax issues related to these operations are concentrated in three specific points:
- Capital gains taxation only in case of the goods resale.
- Works of art and collection are exempted from taxation on the Wealth Tax (ISF).
- Death Duties are payable in the event of bequest.

In summary, ownership of special works or collectibles are exempt from Wealth Tax without any conditions and therefore do not require notification.

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For Businesses


When a company invests in art, it can benefit from a tax reduction on the condition to exhibit works to the public.

The reduction is calculated from the year of acquisition over the following four years. The work will be recorded as an asset immobilized on these four years and the sum will be divided into equal shares on a limit of 5 per thousand of turnover excluding tax.

To take advantage of this tax benefit, the condition is the public exhibition of works in the five years following the acquisition. When the price of the work is less than 5000 EUR HT, the exposure condition can be ensured by the presentation of the work in a place accessible to customers and other outside associates of the company, in addition to the office employees.

The deductions shall be immediately reinstated when the work is sold or removed from the reserve account. This deduction does not require prior authorization from the administration. When a company the company makes this type of declaration it must follow the proper administrative template for declairations. At the time of sale the profit is subject to the arrangements of Capital Professional gains, which means there is a tax at reduced rate beyond two years of ownership.

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For Individuals


For individuals, the primary benefit is the reduction of the Wealth Tax. The price of the work is to be deducted in calculating of the Wealth Tax base. They have a choice in the Capital Gain taxation: 5% of the value or a normal taxation 27% with a reduction of 10% per year after two years of ownership.

For estates, the work of art can be included in the package of 5% of household furniture. On the other hand, the works of art can be used as an asset against liabilities.


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