Did you know that the purchase of original art in Canada is tax deductible?

Buying Canadian artwork, paintings, etchings, sculptures, drawings, photographs, etc. is considered as an amortization expense for corporations or individuals who operate a business. It qualifies as a tax deduction provided that certain criteria are met. The Canadian tax law allows business owners to purchase and write-off Original Canadian Art in its entirety. The acquisition of Original Canadian Art is included in the Capital Cost Allowance for all Canadian businesses, so long as the Artist was a Canadian Citizen when creating the work and the work of art is an original worth a minimum of $200. (more from the CRA website about business expenses and art)

If you own a business, there are some great tax benefits to collecting Canadian Art.

Purchase must be original artwork by a Canadian artist (citizen or permanent resident). Artwork valued at less than $200 is a one-time class 12 deduction at 100% of the purchase price. Artwork valued at greater than $200 can be claimed at 100% of purchase price as a class 8 capital cost allowance depreciable at a rate of 20% per year.

Example: If a painting is $10,000, the amount that can be claimed each tax year is: Year 1 - 20% of $10,000 can be claimed as a deduction = $2000 Year 2 - 20% of $8000 (the remaining value from year 1) =$1600 etc.

We strongly recommend you contact a Chartered Professional Accountant regarding the specifics of your purchase to determine if it will qualify for a deduction.