CANADIAN TAX CREDIT INCENTIVES
Purchasing artwork from COASTAL WAVES FINE ART can have more benefits than just owning a beautiful piece. You may be eligible for Canadian tax credit incentives for purchasing artwork. Here I provide you with more information about this unique opportunity and how it could apply to your purchase.
If you are a business owner in Canada and you want to purchase artwork for your place of business, you may be eligible for tax deductions. According to the Canada Revenue Agency (CRA), you can deduct the cost of Canadian artwork as a business expense if it meets the following criteria:
- It is a print, etching, drawing, painting, sculpture, or other similar work of art
- It is valued at $200 or more, verifiable by invoice or receipt
- It is produced by a Canadian artist, or an artist who was Canadian at the time of creating the artwork
- It is displayed in a place of business where it will be seen by clients and/or employees
The amount you can deduct depends on the value of the artwork and the tax year. For artwork valued at less than $200, you can claim a one-time deduction of 100% of the purchase price. For artwork valued at more than $200, you can claim a capital cost allowance (CCA) of 20% per year at the federal level and 33% per year at the provincial level. This means you can deduct a portion of the purchase price each year until you fully depreciate the artwork.
However, not all artwork purchases are tax deductible. You cannot deduct the cost of artwork if it is purchased for your home (unless your home is your place of business), as a personal item, as a gift, or as a short-term purchase to re-sell for profit.
If you are interested in investing in Canadian art and benefiting from tax incentives, you should consult with a tax professional to ensure you meet the eligibility criteria and follow the proper reporting procedures.