Artist's exemption from income tax

Rules

People who are claiming Artists Exemption must be resident, or ordinarily resident and domiciled, in the State and not resident elsewhere. However, the Revenue Commissioners are prepared to give advance opinions regarding the exemption to claimants who are resident abroad. If these claimants receive a favourable advance opinion, they are given a formal determination in respect of Artists Exemption once they take up residence in the State.

Since January 2007, there is a restriction on the use of reliefs by high income taxpayers. This includes those who qualify for Artist Exemption but only applies where income is more than €250,000. In that case the amount of relief will be limited to 50% of income.

From January 2011 the maximum amount exempted is €40,000.

Section 195 of the Taxes Consolidation Act, 1997 provides that a work for the purpose of the Section is an original and creative work if it is in one of the following categories:

• Books or other forms of writing
• Plays
• Musical compositions
• Paintings or other similar pictures
• Sculptures.

In broad terms, therefore, in order to secure exemption under Section 195, your work has to be both original and creative and to have either cultural merit or artistic merit. It is not necessary for your work to have both cultural and artistic merit - the presence of either quality is sufficient.

Cultural or artistic merit

A work has cultural merit if:

• Its contemplation enhances the quality of individual or social life as a result of its intellectual, spiritual or aesthetic form and content.

A work has artistic merit when:

• Its combined form and content enhances or intensifies the aesthetic apprehension of those who experience or contemplate it.

Original and creative work

For the purpose of a determination under Section 195 of the Taxes Consolidation Act, 1997, the term original and creative encompasses any unique work that is brought into existence for the first time as an independent entity by the use of its creator's imagination.

A non-fiction book or other piece of writing will be considered original and creative only if:

• It is an example of one of the following categories of literature (and any combination thereof) coming fully within the terms of the reference of the Arts Council encompassing the subjects of fiction writing, drama, music, film, dance, mime or visual arts and any related commentaries by bona fide artists:

• Arts criticism
• Arts history
• Arts subject works
• Arts diaries
• Autobiography
• Belles-lettres essays
• Biography
• Cultural dictionaries
• Literary translation
• Literary criticism
• Literary history
• Literary diaries

And

• The essence of the work is the presentation of the author's own ideas or insights in relation to the subject matter and these ideas or insights are so significant that the work would be regarded as a pioneering work casting new light on its subject matter or changing the generally accepted understanding of the subject matter.

Or

• The publication comes fully within the terms of reference of the Heritage Council, including work that, in its entirety, is a work of archaeology or a publication associated with items or areas of significant heritage value

Or

• The work is a publication that comes fully within the terms of reference of the National Archives Advisory Council and is a work that relates to archives concerning Ireland that are more than 30-years-old and are based largely on research from such archives.

Works that are not considered to be original and creative

The following types of work will not be regarded as original and creative:

• A book or other piece of writing that is published primarily for or that is or will be used primarily by students pursuing a course of study or people engaged in any trade, profession, vocation or branch of learning as an aid to professional or other practice in connection with the trade, profession, vocation or branch of learning.
• An article or series of articles published in a newspaper, magazine, book or elsewhere - except a book that consists of a series of articles by the same author connected by a common theme and that is therefore capable of existing independently in its own right.
• Types or kinds of plays that are written for advertising purposes and do not exist independently in their own right by reason of quality or duration.
• Types or kinds of musical compositions that are written for advertising purposes and do not exist independently in their own right by reason of quality or duration.
• Adaptations, arrangements, and versions of musical compositions by a person other than a bona fide composer who is also actively engaged in musical composition.
• Types or kinds of photographs or drawings (other than a set or sets of photographs or drawings that are collectively created for an artistic purpose) that are mainly of record, that serve a utilitarian function or that would not exist independently in their own right by reason of quality or by reference to their potential for inclusion as part of an art exhibition.
• Types or kinds of objects that are primarily functional in nature, objects produced by processes other than by hand or objects produced by hand by people other than those actively engaged as bona fide artists in the field of visual arts.

More information on the Artists Exemptionis available from Revenue.