Is it possible to obtain a tax credit when buying art?

by AGAC

Did you know? Corporate collectors benefit from considerable tax advantages from the Quebec government in the amortization of the purchase of works of art. It is especially good to keep this information in mind at art fairs, the best place to find art to invest in.

For any work of art acquired for the purpose of being displayed in a place of business and whose author is a Canadian citizen or resident at the time of creation, the company can amortize 33.3% of the cost of the acquisition annually on a residual basis.

Conditions to be met:

1. The work of art must have been produced by an artist who was a Canadian citizen or permanent resident at the time it was created

2. The work must have been acquired from a person at arm’s length

3. The work must have been acquired for the exclusive purpose of earning business income, such as decorating a reception area, meeting room, hallway or shareholder’s office, and must be in full view of the company’s customers. The recipient may not take the work to their personal residence unless they have an office where clients visit, as is the case for some self-employed individuals (lawyers, accountants, consultants, etc.).

In the case of a donation to a museum, the fair value of a work of art is increased by 25%.

However, not all artworks are eligible.

To understand all the tax benefits available to businesses, talk to a registered tax professional. For complete details on eligible works of art, refer to the articles of law provided below:

• Regulation respecting income tax, chapter 1-3, r.1, sections 130R1 and following
• The Taxation Act, Art. 710 and following