Business News: Canadian Art is Tax Deductible!
Did you know that for businesses, the purchase of original art in Canada is tax deductible?
The Canadian government recognizes the importance of encouraging the purchase of original Canadian art. Investing in the Canadian art market and its creators offers many benefits to Canadian businesses large and small. The Canadian Government has implemented tax incentives intended to promote the purchase of original Canadian artworks, now is the perfect time to invest in something that makes your business more beautiful. Original art on your corporate walls offers more than monetary returns.
Designated Immediate Expensing Property (DIEP)
This CRA acronym is an important one!
On April 19, 2021, the Canada Government announced new rules under “DIEP”, which allows for immediate expensing (100% write off in the year of purchase) of designated capital assets (including Class 8 capital assets) acquired and in use from the following dates:
- For Canadian corporations:
- For Canadian unincorporated businesses operated by individuals and partnerships
What does that mean?!? Instead of depreciating artworks at 20% yearly for tax purposes, as was the case previous to 2023, under the new rules, businesses are permitted to deduct 100% of the artwork value as a business expense — as long as all the criteria outlined below in this report are adhered to.
Criteria for Tax Deductions: To qualify for these benefits:
- The artwork must be created by a Canadian artist.
- It must be valued over $200.
- The art should be displayed in a place of business, visible to clients, and aim to generate income.
As well, you can recover HST/GST taxes paid during the purchase by claiming input tax credits. Additionally, if you opt to rent the artwork for business purposes, those rental expenses are also deductible.
The benefits of investing in original Canadian art.
Original Art offers opportunities for discussion, entertainment, decoration, and in turn increases the value of your corporate offices. Original Canadian paintings on the walls of your business offers a way to communicate your brand and the warmth of your brand to clients. Original art injects taste, class, and ups your game as a corporation. Original Canadian art on your corporate walls communicates character and community, not only to your clients but also your employees.
The Canadian tax law allows business owners to purchase and write-off Original Canadian Art in its entirety.
Final Thoughts.
There’s no doubt that investing in Canadian art is good for business. It not only enhances the atmosphere but also reflects a dedication to the Canadian art scene and offers significant tax benefits. I recommend consulting your CPA to understand the specifics before purchasing Canadian art to ensure you maximize your deductions.
For businesses interested in Canadian art investments, I offer a diverse collection of sculptures that both beautify your workspace and fulfill the above mentioned criteria.. contact@.michaelbpocock.ca