Artist's exemption from income tax

Introduction

Income earned by writers, composers, visual artists and sculptors from the sale of their works is exempt from tax in Ireland in certain circumstances.

Section 195 of the Taxes Consolidation Act, 1997 allows the Revenue Commissioners to determine that certain artistic works are original and creative works generally recognised as having cultural or artistic merit. Earnings from these works are exempt from income tax from the year in which the claim is made.

Guidelines have been drawn up to determine whether a work is an original and creative work and whether it has cultural or artistic merit.

The Revenue Commissioners can make determinations in respect of artistic works in the following categories:

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

Rules

To apply for the Artist's Exemption you must be resident, or ordinarily resident and domiciled, in an EU member State or in an EEA State and not resident elsewhere. However, the Revenue Commissioners can give advance opinions about the exemption to people who are resident outside the EU or EEA. If you receive a favourable advance opinion, you are given a formal determination of Artist's Exemption once you take up residence in the EU or EEA.

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

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

Your work must 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 quality of form and/or content significantly enhances one or more aspects of national or international culture.

A work has artistic merit when:

  • Its quality of form and/or content enhances to a significant degree the canon of work in the relevant category.

Original and creative work

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 by the Revenue Commissioners to be original and creative and of cultural and artistic merit only if it is an example of one, or a combination of, the following categories coming fully within the terms of 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
  • Artists' diaries
  • Autobiography
  • Belles-lettres essays
  • Biography
  • Literary translation
  • Literary criticism
  • Literary history
  • Literary diaries

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 or Irish people that are more than 30 years old and are based largely on research from such archives.

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.

Types of works excluded from the Artist's Exemption scheme

The following types of work will not be regarded as original and creative or ofcultural or artistic merit:

  • 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.
  • A book or other piece of writing that is published primarily for, or that is or will be used primarily by, 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.
  • Any work of journalism published in a newspaper, journal, magazine, on the internet or on any other similar medium.
  • Any writing, visual or musical work, or other like work, created for advertising or publicity purposes.
  • Adaptations, arrangements, and versions of musical compositions which are not of such musical significance as to amount to original composition.
  • Types or kinds of photographs, drawings or paintings that are mainly of record, that serve a utilitarian function or which are created primarily for advertising, publicity, information, decorative or other similar purposes.
  • Types or kinds of works of sculpture that are mainly functional in nature.

Payments to artists that are exempt from tax

The following payments are exempt from tax from when they are made to an artist who has received an Artist's Exemption:

  • Payments from the sale of works that are considered eligible under the Artists Exemption scheme
  • Arts Council bursaries when paid directly to the artist
  • Residencies when paid directly to the individual by the Arts Council for the purpose of producing a qualifying work
  • Cnuas payments made under the Aosdana Scheme
  • Advance royalties.

Advance royalties

Where an artist receives advance royalties towards the subsequent publication of a book or other piece of writing, he or she must apply for the Artist's Exemption in the tax year in which the royalties are paid if the royalties are to be exempt from tax. When applying for the exemption, the artist must provide confirmation from the publisher that the book will be published. A draft copy of the work must also be submitted.

Where an application is received in the tax year in which the advance is received but a determination has not yet been made, any tax liability arising on the advance must be paid. If a determination is subsequently granted, the Inspector of Taxes will review the artist's liability and make any appropriate refund if tax has been overpaid.

Advance royalties that are paid before the year of claim are not exempt from tax.

You can get information on the Artist's Exemption from Revenue.

Rates

The maximum amount exempted is €50,000 (this was €40,000 prior to 2015). The exemption only applies to income tax. The artist's exempt income is subject to the Universal Social Charge and PRSI at the appropriate annual rates.

How to apply

Claiming tax relief

To apply for the Artist's Exemption, you should submit a claim form to the Revenue Commissioners, together with samples of your work and any supporting documentation (such as testimonials), that you consider appropriate. Your claim should include evidence that your work has been published, produced or sold. You can get an Artist Claim Form 2(pdf) from Revenue - see 'Where to apply' below.

You will need the following samples and supporting documents for the following categories:

  • Books or other writing - 3 published copies of the book or relevant information and links in the case of ebooks
  • Plays - a copy of the play, together with a signed production contract
  • Musical compositions - CDs on which you are credited with the music or lyrics or relevant information and links in the case of downloads
  • Paintings or other similar pictures- 6 good quality photographs along with a brief CV of your artistic career to date
  • Sculptures - 6 good quality photographs along with a brief CV of your artistic career to date.
If you are living outside the EU or EEA and you wish to get an advance opinion from Revenue on whether you may qualify for Artist's Exemption, you should use Artist Claim Form 3 (pdf).

Where to apply

Office of the Revenue Commissioners

Income and Capital Taxes Division
Artists Exemption Unit
1st Floor, New Stamping Building
Dublin Castle
Dublin 2
Ireland

Tel:(01) 647 5000 Ext: 48224 or 48011
Fax:(01) 679 9287
Homepage: http://www.revenue.ie


Page edited: 29 August 2018