Artists Exemption Information and Guidelines
Section 195 Taxes Consolidation Act 1997 empowers the Revenue Commissioners to make a determination that certain artistic works are original and creative works generally recognised as having cultural or artistic merit.
The first €40,000 per annum of profits or gains earned by writers, composers, visual artists and sculptors from the sale of their work is exempt from income tax in Ireland in certain circumstances.
The €40,000 limit was introduced in the tax year 2011.
Guidelines have been drawn up by the Arts Council and Minister for Arts Heritage and the Gaeltacht, with the consent of the Minister for Finance, for determining for the purposes of Section 195 whether a work is an original and creative work and whether it has, or is generally recognised has having cultural or artistic merit. The Revenue Commissioners may consult with a person or body of persons, such as The Arts Council, which may be of assistance to them in reaching decisions in relation to Artists Exemption.
The scheme provides that the Revenue Commissioners can make determinations in respect of artistic works in the following categories only:
- a book or other writing
- a play
- a musical composition
- a painting or other like picture
- a sculpture
Claimants for Artists Exemption must be resident or ordinarily resident and domiciled, in the State and not resident elsewhere. The Revenue Commissioners are prepared to give advance opinions regarding a work of prospective claimant’s resident abroad. In the event that a favourable advance opinion is given, the prospective claimant will be advised to make a formal application for a determination on taking up residence in the State and meeting the necessary residence requirements.
- How to Obtain a Determination
- Advance opinion for Non- Residents
- Advance Royalties
- Right of Appeal
- Income Levy and Universal Social Charge
- PRSI ,VAT and the High Earners Restriction
- Freedom of Information
- Artists Exemption Guidelines
How to Obtain a Determination
Writers, composers, visual artists and sculptors seeking Artists Exemption should submit a claim form to the Revenue Commissioners together with samples of their work and any supporting documentation in the form of testimonials etc which they consider appropriate. Such claims should be also accompanied by evidence that their work has been published, produced or sold.
Any income earned from a work before the tax year in which the claim is made will not be exempt.
Claims for Artists Exemption should be made on Claim form Artist 2 (PDF, 357KB). A determination granted on the basis of this claim form will cover the particular work or works submitted with the claim as well as all future qualifying works in the same category, provided they fall within the guidelines.
Depending on the category in which artists exemption is being claimed the following items should be submitted in support of a claim
- a book or other writing - 3 published copies of the book
- a play - a copy of the script along with a signed production contract
- a musical composition - CDs on which claimant must be accredited
- a painting or other like picture - 8-10 good quality photographs of work together with evidence of sale i.e invoices and a brief CV of artistic career to date
- a sculpture - as at (d) above.
Advance opinion for Non- Residents
Revenue will give an advance opinion to individuals resident abroad. In the event that the individual becomes resident in the State and is not resident elsewhere, a formal determination will then be made
Where a taxpayer receives advance royalties, which are attributed to the subsequent publication of a book or other writing, a claim must be made with the Revenue in the tax year in which the royalties are paid if the royalties are to be exempt. Confirmation from the publisher that the book will be published must accompany the claim.
Where a claim is received in the tax year in which the advance is received, but where a determination has not been granted, any tax liability arising on the advance must be paid. If a determination as to exemption is subsequently granted, the Inspector of Taxes will review the taxpayer's liability and make any appropriate refund if tax has been overpaid.
Advance royalties paid in the year before a claim is made are not exempt. The normal accounting rules concerning the recognition of income will apply.
These are generally taxable as income. Whether they qualify for the exemption is determined by whether they are related to a category of work of the artist that comes within the artists exemption scheme or related to work of the artist that is outside the scope of the scheme, subject to a combined annual cap of €40,000 from the tax year 2011.
- Arts Council Bursaries when paid directly to the individual by the Arts Council
- Cnuas payments made under the Aosdana Scheme.
- Payments from the sale of qualifying works abroad which fall within the Guidelines
- Residencies when paid directly to the individual by the Arts Council for the purposes of producing a qualifying work. (Residencies which relate to teaching art or similar type practice do not qualify for exemption.
Right of Appeal
A claimant has a right of appeal if the Revenue Commissioners do not make a determination in relation to the claim within six months of the claim being made. The appeal must be made by notice in writing to the Revenue Commissioners and it must be made within 30 days after the end of the six month period.
The normal provisions of appeal in relation to the hearing/rehearing of appeals and the stating of cases for the High Court apply
Income Levy and Universal Social Charge
Artists Exemption provides only for an exemption from income tax. Artists exempt income for the years 2009 and 2010 is subject to the Income Levy at the appropriate annual rates. From the tax year 2011 the artists exempt income is subject to the Universal Social Charge at the appropriate annual rates.
PRSI ,VAT and the High Earners Restriction
In certain circumstances artists exempt income may be subject to PRSI, VAT and the Higher Earners Restriction.
Freedom of Information
In the event of an individual receiving a favourable determination the individuals name and the type/title of their work will be published on the Revenue website in accordance with the Freedom of Information Acts
Determinations made since 1st April 2002 are published on the revenue website under: Artists Exemption - Individuals who received a favourable determination in the period since 1 April 2002 - Section 195 TCA, 1997
Determinations made in the period 21st April 1998 to 31st December 2001 are at: Artists Exemption - Individuals who received a favourable determination during the period 21 April, 1998 to 31 December, 2001 - Section 195 TCA, 1997 (PDF, 446KB)
There are two forms as outlined below:
- Claim form Artist 2 (PDF, 357KB)
- Application form Artist 3: advance opinion for non-resident (PDF, 266KB)
Claim Forms and Information:
Office of the Revenue Commissioners,
Income and Capital Taxes Division,
(Artists Exemption Unit),
New Stamping Building,
Tel: + 353 1 6475000 Ext:. 48011, 48684 or 48224
Fax: +353 1 6799287
Artists Exemption Guidelines