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Tax exemption or why invest in a work of art...

Extract from the General Tax Code


Article 238a AB

Modified by Law n°2005-1720 of December 30, 2005 - art. 70 JORF 31 December 2005

Companies which purchase, as from 1 January 2002, original works by living artists and register them in a fixed asset account may deduct from the result of the year of acquisition and the following four years, in equal fractions, an amount equal to the purchase price.

The deduction thus made for each fiscal year may not exceed the limit mentioned in the first paragraph of 1 of Article 238 bis, minus the total of the payments mentioned in the same article.


To benefit from the deduction provided for in the first paragraph, the company must display in a place accessible to the public or to employees, with the exception of their offices, the property it has acquired for the period corresponding to the exercise of acquisition and the following four years.

Sums corresponding to the purchase price of musical instruments are also deductible under the conditions provided for in the first paragraph. To benefit from the deduction, the company must undertake to lend these instruments free of charge to performers who request them.


The company must enter in a special reserve account on the liabilities side of the balance sheet a sum equal to the deduction made pursuant to the first paragraph. This sum is reintegrated into the taxable result in the event of a change of assignment or transfer of the work or instrument or deduction from the reserve account.


The company may establish a provision for depreciation when the depreciation of the work exceeds the amount of the deductions already made under the first to fourth paragraphs.


Example: A company has a turnover of €500,000. It can acquire at most works by living artists for 5 per thousand of its turnover excluding tax, ie: (5/1000)*500,000€ = 2,500€.


The deduction made for each fiscal year, recorded in a special reserve account, may not exceed the limit of 5 percent of turnover, minus the total of other deductions made for sponsorship...



The maximum deduction ceiling is, the first of the 5 years: €2,500*20% = €500. It is also €500 for the following four years. Therefore, the company deducts from its taxable result each year for 5 years, 500€. If this company is taxed at 50%, it “saves”: €500*50% = €250 in corporate tax for 5 years. (i.e. €250*5 = €1,250 over 5 years, which corresponds to half the cost of acquiring the works). 

tax exemption

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