Roche & Cie

Precious objects and flat tax : very expensive option …

25 Nov 2016

For both investors and enthusiasts, the market of precious objects has returned in recent years in a positive dynamic. But this thinning should not mask the fiscal stakes attached to the sale of such objects.

In fact, the precious objects are subject, at the time of their sale, to a flat rate tax of which here is a detailed summary.


Precious objects and flat tax : very expensive option …

What is a precious object?

The expression “precious objects” includes a whole range of diverse and varied objects: from the unmistakable masterpiece to the hundred-year-old carpet, passing by prints,

fine pearls, diamonds (neither mounted nor set ), Vehicles and other collectibles.


Who is taxed on the sale of a precious object?

In addition to professionals and artists whose regime differs, we are concerned here with individuals.

The tax on precious objects concerns only individuals residing in France. Thus, non-residents are exempt.

Which transactions are subject to this flat rate tax?

It is a matter of taxing the sale made in France or in a country of the European Union whose amount exceeds 5 000 euros. Below this amount, the transfer is exempt.

How then is the sale of a precious object imposed?

In this case, as the occasion is rare enough to underline it, the seller of such a property has a choice: to release himself by the payment of a flat-rate tax or to opt to submit his surplus value to the surplus- Gains on movable property.

However, this option is limited: the transferor can not be exempted from a flat-rate tax and therefore be taxed under the capital gains regime only if tangible proof is provided of the date and the purchase price of the asset, Or to be able to justify a holding of that property in excess of twenty-two years.

This obsolete obstacle raises the question of the most favorable regime. The answer is relatively simple because it consists of a comparison between the two proposed proportional rates, which apply however to different tax bases:

  • On one hand, the flat rate tax and its 6% rate, plus 0.5% under the CRDS. This tax is based on the price of the sale of the property: the amount to be paid can therefore quickly fly away.
  • On the other hand, the system of capital gains on movable property and its rate of 19%, to which it will of course be necessary to add 15.5% in respect of the social levies. This time the tax base is reduced to the only surplus value, that is the difference between the sale price of the precious object and its purchase price.Let us specify two fundamental things about the calculation of surplus value:
  • The seller may benefit from a deduction for period of detention. It consists of a reduction of the tax base by 5% per year beyond the second year of detention, ie a total exemption after twenty-two years (including social contributions, unlike buildings).
  • The acquisition price may be increased by the justified acquisition costs and the costs of restoration of the property.

Although the system of capital gains on movable property is frequently more advantageous, in particular as a result of the deduction for holding periods, consideration must be given to the choice of the option on a case-by-case basis, since, 34.5%, the taxation of capital gains can also be very expensive.

Finally, we should not neglect the other tax consequences of such an operation, such as the impact on the cap of the wealth tax …

Cabinet Roche & CieChartered Accountant in France (Lyon).
Specialist in Real Estate and Non-Residents’ taxation.