All that you always wanted to know about the tax system of the sale

Sometimes, the owner of jewels, works of art or antiquity(antique) cannot justify the origin of his properties(goods). Indeed, a large number of objects, initially worthless, was able to be given, to acquired without invoice at an antique dealer, or passed on(transmitted) from generation to generation. According to the modes(fashions) or to the fortuitous discovery, the good(property) bought from low(weak) price(prize) or forgotten in the attic becomes a precious object. The French tax system knew how to adapt itself to these situations, by planning an original and supple(flexible) system of taxation of the sale or the export (likened fiscally to a sale). The works of art and collection sold for an amount lower than 5 000 euros are not taxed. Beyond this amount, the seller can, according to the cases, choose a fixed taxation or opt for the common law scheme. If the owner of a work of art does not arrange an invoice, does not have the possibility of justifying the origin of the work, he(it) is necessarily subjected to the fixed tax. This tax represents 5 % of the sale price (including expenses), whatever is the mode of sale. She must be acquitted(settled) by the intermediary – the company(society) of sales or the gallery – for the seller. This tax, as a rule exceptional regime, became common(current), to the point that the numerous professionals use systematically this option, without verifying if it is possible to limit(ease) the tax system by justifying the origin of the work. When a collector has documentary evidences with his name, the price(prize), the purchase date and the characteristics of the work, he can opt either for the fixed tax, or for the common law scheme, which exempts him(it) from the aforementioned tax. Are admitted as proof: An invoice freed(delivered) by an auctioneer or an intermediary, an extract of statement(declaration) having been of use as base(basis) to the liquidation of transfer taxes in case of succession or of donation … But attention, a certificate of authenticity cannot be used. From then on, it is advisable to be very watchful and to keep(preserve) any element allowing to show: the harmless good(property) in a given date can become very sought(studied) a few years later. In case of resale, the existence of such a document will allow a substantial fiscal economy.

It’s more than 12 years

The common law scheme of taxation of the capital gains of works of art is advantageous when the collector holds the works to be sold for some time. The capital gain is calculated on the basis of the difference between the purchase price (which takes into account expenses of purchase and possible restoration) and the price of resale. This capital gain is then the object of a 10 % dejection a year of ownership beyond the second year. What leads to a total exemption if the work is held for more than twelve years in the heritage of the seller. The tax to be paid is then 26 % (16 % + social 10 % of taking) of the capital gain reduced by the game of the dejection.If he chooses this diet, the seller has to give evidence to the tax office of its place of residence, in the month as from the transfer, the declaration N 2048 M accompanied by the payment of the tax. The seller will have no declaration to be put down if the work is exempted by application of the dejection or if it generates no capital gain. In case of payment, the taxpayer receives a double of the declaration N 2048 M annotated by the tax office. This document exempts him from the tax to fail in case of sale or during the formalities of export.