Buying art allows, when you know the processes, to make savings on taxation. Whether you are an individual, a professional or an artist creator, here are 5 things to know to avoid tax when buying art.
Tax exemption in art: a specific system
Keen to promote the creation of art and its trade, most of the countries in the European Union offer a privileged tax status. The latter allows purchasers and artists to benefit from tax cuts, but equally exemptions and personal tax rates.
This tax exemption is subject to fluctuations according to its legal status but the first goal remains: to enable the art market to exploit its potential to the maximum by offering the creators advantages that lead them to creation.
Defiscalizing art: benefits for individuals
Advantageous for taxable individuals, the purchase of art makes it possible to be exempt from the invested sums with the declaration of EWB, which become therefore non-taxable. Another advantage, the purchase and resale of works of art whose value does not exceed 5,000 euros are tax free. Above this amount, the seller may choose between a flat rate of 5% or the application of the ordinary law regime for taxations for the most valued of the art market.
Defiscalising art: benefits for businesses
For the past 32 years, companies have been able to reduce their taxable profits by deducting the amount of a purchase of a work of art belonging to a creator who is still alive. This total amount may not exceed five per thousand of the turnover, minus the set of possible deductions under Article 238 AA of the CGI.
Defiscalizing art: benefits for creators
Called law of artist’s resale rights, this device which was created in 1920, allows the creators of a painting to continuously receive pay on the subsequent sales of his work. It allows to distribute a fairer share of the profits that his work can earn between every sale of his work, regardless of inflation or deflation. Like the Copyright, the resale right runs for the whole lifetime of the artist and ends 70 years after his death.
Defiscalising art: the position of the french country
It should be noted that France was the world market leader before the war between 1939/1945, and now ranks fourth with 5.90% of the world market behind China, Germany and the United Kingdom. Although this relative loss in the ranking, France remains one of the ( if it is not the) most active protagonist (s) in the implementation of benefits to ensure favourable tax position for the art trade.
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