When wine and art don't mix

A company operating a vineyard underwent a tax audit, following whichadministration issued a tax assessment regarding expenses related to the preservation of works of art.

administration that the expenses incurred by the company to acquire two works of art, as well as the construction of a museum-style warehouse to house the contemporary art collection of the company’s manager and his wife, were not incurred in the direct interest of the business. 

The company, which challenged the tax assessment in court, argued instead that "these expenses helped link wine production to the high-end image of contemporary art, that they were part of a comprehensive communications strategy within a group that included, notably, its sole client, Maison B..., to which it sells its production and which markets the wines, and that, in its view, they helped promote the marketing of the latter’s products and consequently increase its own revenue.”

The Administrative Court of Appeals will, however, note that:

• the company does not sell directly to consumers, and the company to which the products are sold generates "only a minor portion of its revenue from sales to individuals";

• the company has not provided any evidence that the increase in its revenue is attributable to the display of the works of art;

• nor does it provide any evidence that the communication strategy was implemented to enhance the company’s image;

• The fact that the communication policy is carried out on behalf of the company that markets the business’s products does not prove that the expenses are incurred in the direct interest of the business.

The Court therefore finds that the company was not entitled to deduct the expenses.

The tax assessment has been finalized. 

CAA Marseille, July 10, 2025, No. 24MA00179

This monitoring service is provided by Mispelon Avocat, a law firm specializing in tax audits and tax litigation. You can stay updated by subscribing to the newsletter via this link.