Tax Incentives for Canadian Art

Purchasing Canadian artwork, including paintings, etchings, sculptures, drawings, and photographs, can qualify as an amortization expense for both corporations and individuals operating a business, making it eligible for tax deductions under specific conditions outlined by Canadian tax law.

Business owners can write off the entire cost of acquiring Original Canadian Art as part of the Capital Cost Allowance, provided the artist was a Canadian citizen at the time of creating the work, and the artwork is an original valued at a minimum of $200. For artworks valued at less than $200, a one-time class 12 deduction at 100% of the purchase price is applicable. For those valued at more than $200, they can be claimed at 100% of the purchase price as a class 8 capital cost allowance, depreciable at a rate of 20% per year.

For instance, if a painting costs $10,000, the amount claimable each tax year would be calculated at 20% of the remaining value from the previous year. It's crucial to consult with a Chartered Professional Accountant to ensure your specific purchase meets the requirements for deduction.