Buying and/or Renting Art
Did you know that supporting the arts could be fiscally advantageous?
The Canadian governments have recognized the importance of encouraging the visual arts and its creators by implementing tax incentives intended to promote the purchase of original Canadian artwork.
Buying artwork is considered an amortization expense for companies and business owners. It qualifies as a tax deduction provided the artwork was created by a Canadian artist, cost at least $200 and is exhibited in a place of business where it will be seen by clients. If the purchase meets these criteria, the taxpayer can amortize 20% of the purchase cost at the federal level and 33.3% at the provincial annually. However, in the first year of the purchase, the half-rate rule applies. Therefore, the amortization corresponds to 10% for the federal and 16.67% for the provincial.
Moreover, if the buyer is a GST registrant, he/she can recover the taxes paid at the time of purchasing the artwork by claiming input tax credits.
Renting art also has tax benefits. If the work is rented instead of being purchased, the rental expenses are deductible. If renting art work is something you're considering, you'll be interested to know that Montreal's L'Artothèque offers over 3000 original pieces for rent at affordable prices.
Take advantage of the Capital Cost Allowance (CCA) to make your business stand out while encouraging Canadian artists. For more information, read "The art of expensing: How businesses can get a tax deduction for office decor" and view Canadian Income Tax Regulations regarding buying Canadian Art.
Did you know that supporting the arts could be fiscally advantageous?
The Canadian governments have recognized the importance of encouraging the visual arts and its creators by implementing tax incentives intended to promote the purchase of original Canadian artwork.
Buying artwork is considered an amortization expense for companies and business owners. It qualifies as a tax deduction provided the artwork was created by a Canadian artist, cost at least $200 and is exhibited in a place of business where it will be seen by clients. If the purchase meets these criteria, the taxpayer can amortize 20% of the purchase cost at the federal level and 33.3% at the provincial annually. However, in the first year of the purchase, the half-rate rule applies. Therefore, the amortization corresponds to 10% for the federal and 16.67% for the provincial.
Moreover, if the buyer is a GST registrant, he/she can recover the taxes paid at the time of purchasing the artwork by claiming input tax credits.
Renting art also has tax benefits. If the work is rented instead of being purchased, the rental expenses are deductible. If renting art work is something you're considering, you'll be interested to know that Montreal's L'Artothèque offers over 3000 original pieces for rent at affordable prices.
Take advantage of the Capital Cost Allowance (CCA) to make your business stand out while encouraging Canadian artists. For more information, read "The art of expensing: How businesses can get a tax deduction for office decor" and view Canadian Income Tax Regulations regarding buying Canadian Art.