Wed, 16 Sep
2009

ATO - Release Tax break for Art Purchasing

Art Investment Allowance

The ATO have confirmed that small businesses are eligible to receive an investment allowance of up to 50% on the purchase of artworks for the 2009 income tax year.  

Specialist arts accountancy firms sought this advice in June by putting forward a number of guidelines that they believed would enable artworks to be claimed under the new allowance. 

One of the most important of these was that the allowance should only apply to new artworks created by professional artists registered with an ABN.  

Accountancy firms argued and the ATO accepted that an art-enhanced work environment can generate greater productivity and that there is a causal relationship between businesses displaying artwork and the income of their clients. 

Among the other guidelines accepted by the ATO to qualify for the allowance are:

1. When buying artworks businesses must demonstrate a dominant business-related purpose for their display; be only a small business that has a turn over less than 2 million per annum
2. Artworks should be portable (capable of being moved from one place to another); and in a tangible form ie: have a material component that is clearly visible to the owner.
3. Artworks should be held for at least a year before being sold.
4. Works have to be purchased before December 31st 2009
5. Only purchases above $1000 qualify
6. Works must be originals by professional living artists who are registered with an ABN no. and not owned by any other party but the artist prior to purchase.
7. Artworks bought as trading stock are not eligible
8. Works can only be purchased through the artist; or their respective agent or commercial gallery acting on behalf of the artist.