Ireland Confirms UK Artists Qualify for Tax Exemption
Under the scheme, a limited amount of income earned by writers, composers, visual artists and sculptors from the publication, production, or sale of their works is exempt from income tax in Ireland.
For 2015 and subsequent years, the maximum amount of income that is exempt is EUR50,000 annually. However, the exemption does not apply to Pay Related Social Insurance and the Universal Social Charge.
To qualify for the scheme, an individual must be resident or domiciled in an EU or EEA member state or the UK.
Applicants must also satisfy guidelines drawn up by the Arts Council and Minister for Arts setting out whether a work is original and creative and has cultural or artistic merit. The following samples must be submitted in support of an application:
- A book or other piece of writing, either in full electronic version or in the form of three published books.
- A play, including a copy of the script and a signed production contract.
- A musical composition, including a link to a digital download or a CD with proof that the applicant is accredited with the music and/or lyrics.
- A painting or similar picture, including six good quality photographs of the works and a brief CV of the applicant’s artistic career to date.
- A sculpture, also with six photographs and a CV.
Applications must be submitted by email to the special Artists Exemption Unit at the Revenue. Then, if the work comes within the relevant legislation and satisfies the criteria set out in the guidelines, the Revenue Commissioners will make a determination and annual income up to a maximum of EUR50,000 deriving from the work will be exempt from tax.
A determination generally covers the original work submitted as part of an application and subsequent works that fall into the same category. However, separate applications must be made for works falling into another category, such as if an author of books goes on to write a play.
Other Exempt Payments
Various other payments may also be included as exempt income. These are:
- Bursaries, including those paid directly by the Arts Council and by the Aosdána, an association for artists.
- Residencies when paid directly by the Arts Council for the purposes of producing a qualifying work.
- Payments from abroad from the sale of qualifying works.
- Advance royalties.
Signed and numbered limited editions of fine art prints and photographs also qualify for the exemption, as do signed and numbered sculptural reproductions (up to a maximum of 10) and mechanical royalties paid under a recording contract.
Artists thinking of applying for the exemption should also note tax rules designed to limit the number of tax reliefs an individual can claim in any one year. If affected, those earning over EUR400,000 may be subject to an effective tax rate of 30%. Affected individuals with income between EUR125,000 and EUR400,000 may see a partial restriction on reliefs. Those earning less than EUR125,000 or who claim less than EUR80,000 in “specified reliefs” (of which the Artists Exemption is one) are unaffected by these measures.
Individuals in receipt of the Artists Exemption are also required to submit a self-assessment tax return and a statement on a prescribed form (Form RR1).