Categories Taxes

Taxes on art investment?

The payment of taxes on the investments in art depends to a large extent on the investment vehicle used for such investment. In the case of ArtsGain, the co-owner will part of the Investors Equity Fund (called FICC or SICC in Spain) that is designed to pay taxes (or  not) at the time of the capital gain happens, that is at the time of the collection sale after five years (or other is defined) from the date of acquisition and in the case that generates capital gains. This is the standard collection case but ArtsGain may define other vehicles for specific art collections to invest, specially for foreigners.

In the case of co-investors in the form of legal entities established in Spain, FICC provides a full tax exemption of share benefits and gains is determined in accordance to Spanish Law 22/2014 in case of having a percentage greater or equal to 5% of shares of the Fund keeping that percentage for at least one year

In case of the co-invertor is an individual person established in Spain the benefits generated on the sale will affect the IRPF Tax (tax related to personal income) and will imply a taxation of between 19% and 23% of the referred capital gain for Spanish private investors according to current following Spanish Law stretches: 19% up to a gain of €6,000, 21% for the following €44,000 and 23% for more than €50,000.

In the case of non-resident co-investors for individuals or legal entities with permanent residence in Spain, the capital gain tax is determined in accordance with the rules of the Corporate Tax policy and affects to the same way to the previous case.

In the case of non-resident co-investors for individuals and legal entities with no permanent residence in Spain but with permanent residence in the European Union, the capital gain tax is determined in accordance with the rules of the IRNR tax policy and affects to the same way to the previous case.

In any other case, you may check here if your country of residence has established a tax agreement with Spanish Government. In case of existence, you should apply rules of that agreeement.

And finally in case of unexistence of the referenced tax agreeement with your country of residence, that applies to non-resident co-investors for individuals and legal entities with permanent residence out of the European Union, the capital gain tax is determined like not being taxed in Spain, as a consequence no taxes nor withholding will be applicable and then you should apply the taxes in your country of residence.

In case of any questions or specific case, a taxation expert should be considered, although ArtsGain can suggest you to contact with one of our partners.

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