Do you own an Australian business? You could be eligible for an investment allowance of up to 50% for the corporate purchase of art.
Recent advice from the Australian Tax Office confirms that small businesses could be eligible for an investment allowance of up to 50% on new artworks bought through their business before the end of the year.
Advice received by Lowensteins Arts Management from the ATO confirms that businesses with a turnover under $2 million are eligible to receive an investment allowance of up to 50% on the purchase of artworks bought for at least $1,000. Businesses with a turnover of more than $2 million may claim an investment allowance of 10% on the purchase of artworks bought for at least $10,000. This allowance is only available up to 31 December 2009.
Among the ATO guidelines accepted to qualify for the allowance are:
1. The allowance only applies to NEW artworks created by professional artists registered with an ABN, or a recognised overseas artist
2. Artworks are used in Australia primarily for business purposes (an artwork would not qualify if its exposure was limited to only its owner)
3. Artworks must be tangible, therefore excluding digital art
4. Artworks cannot be intended for sale in the foreseeable future
It has been argued that art enhances the work environment - which can generate greater productivity and that there is a causal relationship between businesses displaying artwork and the income of their clients.
The two examples below show how the allowance could be utilised for a small business with a turnover of less than $2 million.
Jason Benjamin artwork purchased for $6,000 (including GST)
Depreciation $ 60
Investment Allowance $3,000
Equates to a tax deduction of $3,060 dollars
Josie Petrick Kemarre artwork purchased for $7,900 (including GST)
Depreciation $ 79
Investment Allowance $3,950
Equates to a tax deduction of $4,029 dollars
Smith & Hall will provide you with documentation to assist you with this allowance on any NEW works purchased for your business, as well as delivery and professional hanging services if you require. We are offering 5% discount on 2-5 pieces bought through an Australian business for delivery, or 10% for a purchase of more than 5 pieces.
This investment allowance will only apply until 31 December 2009, so act now to acquire art for your business.
Call us on 02 8823 4300 to learn more.
