Corporate purchases

Companies that purchase works of art may deduct the purchase price from taxable profit or loss (Article 238 bis AB of the General Tax Code).
To be eligible, it must be an original work of art, created by an artist living at the time of purchase and be recorded as an asset on the balance sheet.
The tax incentive is conditional on displaying the work :

• in a place accessible to the public or employees (excluding individual offices), and
• continuously for the entire duration of the tax relief (5 years)

The tax relief is spread over a 5-year period (20% of the purchase price per year), capped at 0.5% of annual turnover.

Individual purchases

Unlike companies, individuals do not benefit from any tax incentives when purchasing a work of art.
On the other hand, individuals benefit from a preferential tax regime when the work is resold. First of all, works sold for less than €5,000 are not taxed.
Above €5,000, the individual owner has the choice between two capital gains tax regimes :

• Paying a flat-rate tax of 6.5% of the sale price (including costs); or
• Or opting for the capital gains regime: the capital gain is taxed at 36.2% (income tax 19% & social security contributions 17.2%). The capital gain is reduced by a 5% tax allowance after the second year of ownership, reaching total exemption after 22 years of ownership. To benefit from this regime, the seller must be able to prove the purchase date and price of the work (e.g. purchase invoice) or prove that he/she has owned it for more than twenty-two years.