Purchasing Art: Tax incentives on Canadian art

Tax Incentives for Purchasing Canadian Art

Investing in original Canadian art can enhance your workspace while offering potential tax benefits for businesses and professionals in Canada, with a tax write off 20% per year for five years. Canvas Gallery works with corporate clients, designers, and collectors to help you make informed, tax-efficient choices.

How Tax Incentives Work

Under Canada Revenue Agency (CRA) rules, original artwork by Canadian artists may qualify as a capital asset for business use. This can allow for deductions or capital cost allowance (CCA) claims, potentially reducing taxable income when the artwork meets CRA criteria.

Who Qualifies

Eligible purchasers typically include:

  • Corporations, partnerships, and sole proprietors

  • Self-employed individuals who use artwork in client-facing business spaces

  • GST/HST registrants, who may also recover taxes via input tax credits

Artwork purchased solely for personal enjoyment does not qualify.

What Qualifies as Eligible Artwork

To qualify for tax incentives:

  • The work must be original (painting, sculpture, drawing, print, etc.)

  • The artist must be Canadian (citizen or permanent resident at the time of creation)

  • The artwork must be displayed in a commercial or business space visible to clients or the public

  • The artwork must serve a business purpose, not held as inventory for resale

  • Artwork valued at $200 or more is typically treated as a depreciable asset under CRA guidelines

Types of Tax Benefits

  1. Capital Cost Allowance (CCA)

    • Artwork used for business purposes may qualify as a depreciable asset (usually Class 8), allowing costs to be deducted gradually over time.

  2. GST/HST Input Tax Credits

    • Registered businesses may recover GST/HST paid on eligible artwork purchases.

  3. Rental Expense Deductions

    • Renting artwork for business display can also be deductible if CRA criteria are met.

Best Practices

  • Keep invoices and proof of Canadian artist creation

  • Ensure artwork is displayed in business/client-facing spaces

  • Consult your accountant or tax advisor to confirm eligibility and maximize benefits

Why This Matters

Original Canadian art can:

  • Beautify your workspace and impress clients

  • Support Canadian artists

  • Offer potential tax-efficient ways to enhance your business environment

Still Have Questions?

Canvas Gallery helps businesses and designers select Canadian art that fits both aesthetic and financial goals. Contact us to explore options for purchase, on-approval viewing, or rentals. For more detailed information please click here.

Disclaimer

This information is based on CRA rules for depreciable property and commonly accepted practice by Canadian tax professionals. Tax treatment depends on your specific business or personal circumstances. Please consult your accountant or tax advisor for guidance tailored to your situation.