According to Article 238 bis AB of the General Tax Code, companies that purchase, as of January 1, 2002, original works by living artists and register them into a locked-in asset account can deduct from the result of the acquisition exercise and for the next four years, in equal fractions, an amount equal to the purchase price.
The deduction thus made for each fiscal year may not exceed the limit mentioned in the first paragraph of section 238 bis, which is less than the total payments mentioned in the same section.
In order to benefit from the deduction provided in the first paragraph, the company must display in a place accessible to the public or employees, with the exception of their offices, the property it acquired for the period corresponding to the acquisition exercise and the four years to come.
The amounts corresponding to the purchase price of musical instruments are also allowed to be deducted under the conditions set out in the first paragraph. To qualify for the deduction, the company must commit to lending these instruments free of charge to performers who request them.
The company must enter into a special reserve account on the balance sheet liabilities an amount equal to the deduction made under the first paragraph. This amount is returned to the taxable income in the event of a change of assignment or transfer of the work or instrument or withdrawal from the reserve account.
The company may constitute a provision for impairment when the depreciation of the work exceeds the amount of deductions already made under the first to fourth paragraphs.
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