Tax planning and risk management in art investments – Krystian Socik

68,25 

Opis

Author: Krystian Socik

Title: Tax planning and risk management in art investments

Keywords: tax risk; investment risk; alternative investments; art; valuation of artworks; behavioral finance

Jel: K34; G12; G32, Z11

The alternative investment market in Poland, particularly within the art sector, is rapidly evolving in response to low deposit interest rates and increased uncertainty in traditional markets. This study examines the impact of understanding investment and tax risks on potential returns in this dynamic landscape. It argues that investing in artworks can be strategically viewed as a tax expense, offering opportunities to reduce tax obligations and enhance investment returns. Through comprehensive analysis methods including literature review, legal analysis, and case studies, the research asserts that artworks present compelling portfolio diversification benefits due to their low correlation with traditional markets. Notably, investments in contemporary artists yield substantial returns, averaging 5,053% annually. To optimize returns, the study proposes an investment and tax strategy centered around creating an art collection featuring works by emerging artists. Furthermore, it highlights favorable tax treatments for businesses acquiring artworks, positioning such investments as revenue-generating assets for VAT and CIT purposes. Ultimately, the study underscores the importance of leveraging tax advantages to maximize returns in the alternative investment landscape, particularly within the vibrant art market in Poland.