Canadian
Tax Deductions

Buying Canadian artwork, inclusive of paintings, is considered as an amortization expense for Canadian corporations or individuals who operate a business in Canada. Providing that certain criteria are met, it may qualify as a tax deduction.
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Purchase of original art in Canada can be tax deductible

Buying Canadian artwork – inclusive of paintings – is considered as an amortization expense for Canadian corporations or individuals who operate a Canadian business. The purchase can qualify as a tax deduction provided that certain criteria are met. Canadian tax law allows business owners to write-off the purchase of original Canadian art in whole. The acquisition of original Canadian art is included in the Capital Cost Allowance for all Canadian businesses, so long as the artist was a Canadian citizen during the work’s conception and the work of art is an original valued at a minimum of $200 CAD.

Benefits for Canadian businesses collecting Canadian art

Purchase must be original artwork by a Canadian artist (either a citizen or permanent resident). Artwork valued at less than $200 CAD is a one-time class 12 deduction at 100% of the purchase price. Artwork valued at $200 CAD or more can be claimed at 100% of purchase price as a Class 8 Capital Cost Allowance, depreciable at a rate of 20% per year.

Example: If a painting is $10,000, the amount that can be claimed each tax year is:
Year 1 – 20% of $10,000 can be claimed as a deduction = $2000
Year 2 – 20% of $8000 (the remaining value from year 1) = $1600
etc.

We strongly recommend you contact a Chartered Professional Accountant regarding the specifics of your purchase to determine if it will qualify for a deduction.