tax exemption
For businesses and professionals in France, Monaco, Belgium and Luxembourg.
Leasing has financial and tax advantages. Firstly, it allows you to spread the investment burden over several months, without affecting your borrowing capacity.
Secondly, from a tax point of view, lease payments are deductible from your taxable income, reducing your SI or IRPP.
Leasing allows you to buy several times over, while making significant savings.
Choosing the work and signing the rental contract
100% tax-deductible rents Tax optimization
End of lease: purchase option or other financial choice
The operation
- You rent the artwork for a period ranging from 12 to 48 months.
- The rents are 100% deductible from the result for the development and decoration of interior spaces (considered as an operating expense).
- The artwork is exhibited in the company’s premises.
- VAT on the rent is fully deductible.
- Leasing provides flexibility to the company; it can invest in artwork while taxing 33% of its price and up to 75% for a self-employed professional subject to IRPP.
- After the lease period, the artworks are transferred to a third party through a purchase option. The company thus renews the displayed artworks and allows a member of its staff (an employee, a shareholder, or the manager) to become an owner at a lower cost.
The benefits
- Tax Savings: The company deducts the entire monthly payment, which is included in deductible expenses for the development and decoration of interior spaces.
- VAT Reclamation: The company reclaims VAT (if applicable).
- Expense Allocation: No impact on cash flows.
- Creating a Collection at a Lower Cost: At the end of the lease, the financier commits to selling the artwork to you for the residual value.
Example for a purchase price of €10,000, estimated tax rate 31%.
How do you set it up?
As soon as you’ve chosen your work at the gallery, our team steps in to offer you the most attractive solution.
Used for the exercise De Medicis Gallery mandates its leasing partners for you. We offer tax-free and leasing solutions for the acquisition of works of art. In this way, we are responsible for setting up the file and financial configuration with the lessee.
The lessee purchases the artwork from the gallery and leases it back to the company with an option to purchase. The lessee therefore owns the work for the duration of the LLD.
It is always the lessor who offers the company or a third-party beneficiary the opportunity to buy back the work at its residual value (5% to 7% of its purchase value).
TAX EXEMPTION THROUGH THE PURCHASE OF MECENALE
Tax exemption is available to companies purchasing works by living artists.
The companies concerned are :
- Companies subject to corporate income tax (ipso jure or by option).
- Partnerships (taxable and commercial profits).
- The deduction is up to 20% of the cost of labor per year, for 5 years, within the limit of €20,000 or 5% of sales per fiscal year.
- It is deducted from taxable income on an off-balance sheet basis.
Transfer:
- What’s interesting is that, in the event of resale, the capital gains tax is reduced after 2 years and eliminated from the 12th year onwards.
- In the event of a change in the use or disposal of the work, during or after five years of the deductible benefit, the amount of the deduction received by the company is restored to taxable income.
Qualifying conditions:
- The work must be produced by an artist who may or may not be resident in France.
- The work must be displayed with appropriate advertising in a public place accessible to employees, customers, suppliers, etc. during the amortization period of the work, or 5 years.
