As restrictions ease and offices become populated again, coming back to a productive work space has never been more important. And the best part is that under the small business tax allowance, purchasing art for your business is 100% tax deductible.

Which business can claim the tax deduction?

Any small to medium-sized businesses with an annual turnover of less than $500 million qualifies.

How much can I claim?

Business owners can claim up to $150,000 for paintings or sculptures. And there is no limit to how many pieces of art you can make this claim for.

Here’s the background: Artwork is normally subject to a very low rate of depreciation (because their useful life is assessed as 100 years). This works out to be around 1% per year - which not very enticing. BUT the great news is, being classified as a depreciating asset qualifies art for the instant asset write-off .

Is there any artwork criteria ?

The artwork must be:

Tangible;
Capable of being moved;
Purchased with the dominant purpose of display in a business premise or home office
Not be trading stock

What if you are an employee?

As an employee working from home , you may claim an artwork deduction up to the value of $300 as part of your home office expenditure. Any value greater than $300 must be claimed using the usual decline in value rules.

Other stuff

In the past the criteria required artwork to be displayed in your business premises.

Home-based businesses also qualified, as long the artwork was displayed in the home office. You had to prove you would meet regularly clients at your premises. However, as possibly the only benefit of Covid, these rules were relaxed and artwork no longer needs to be confined to the office area.

For full details, please go the relevant section of the ATO website here