Companies that purchase original works by living artists to expose them to the public, or of musical instruments intended to be loaned out to artists can, in certain conditions, deduct the purchase price from their taxable incomeThe works purchased for resale include inventories of the business (dealers, art galleries, or any company involved in the transaction of works of art) and are not entitled to the deduction. the device of the deduction needs to be able to register the purchase price of the deductible to an account of special reserve under liabilities in the balance sheet of the company, which de facto exclude entrepreneurs individual submitted in category of BNC, mainly the professions, which do not have the ability to create on the liabilities side of their balance sheet an account of this nature. To qualify for the deduction, the company must expose the work of art in a place freely accessible to the public or to employees, with the exception of their offices, for years (the period corresponding to the year of acquisition and the following years). The company must be able to prove the existence of the artist at the date of acquisition.
The exposure must be permanent (for the required five years), and not made at the occasion of ad hoc events (exhibition, festival, seasonal, etc.).
Whatever the conditions of exposure to the public adopted by the company, the public must be informed of the place of exposure and the possibility of access to the property. The company, therefore, must communicate the appropriate information to the public, by indications attractive on the location of the exhibition and all promotional means that are adapted to the importance of the work. To qualify for the deduction, the company must commit to pay the instrument free of charge to performers who request it. The company must be able to justify this commitment, in particular by demonstrating that it has proceeded with the advertising of his loan agreement with performers potentially affected: The purchase price of the artwork (or the instrument) may be deducted, so the extra-accounting of the taxable income of the year of acquisition and the following years, by equal fractions (i.e. a th each year) The basis of the deduction consists of the cost price of the work or of the instrument, corresponding to the original value (its purchase price, plus incidental expenses, if any, and deduction of the VAT reclaimable).
The costs incurred in the acquisition, which are not included in its price returns (including commissions paid to intermediaries), are excluded from the basis of the deduction, they are immediately deductible.
The deduction so made in respect of each financial year is capped: it does not exceed the limit of ‰ (per thousand) revenue net of tax, reduced by the total payments made under the patronage. If the fraction of the cost of acquisition cannot be totally deducted in respect of a year, the amount not used cannot be carried forward to be deducted in a future year. For companies subject to corporate tax (IS) or income tax in respect of BIC, the amounts must be deducted from the profit of fiscal year: The company must register an amount equal to the deduction on account of special reserve, recognized in liabilities on the balance sheet. The company may build a provision for impairment, when the impairment of the work exceeds the amount of deductions already made. for the years open from the st of January, companies are subject to tax on the income or corporate tax can obtain a tax reduction equal to the amount of their payments within the limit of or ‰ (per thousand) of the sales revenue when this amount is higher.
