The Artists’ Exemption Scheme was first introduced in 1969. Unique to Ireland, the scheme helps to promote Irish culture and creativity by allowing the income earned from the sale of original and creative works to be exempt from income tax. The scheme applies to writers, composers, visual artists and sculptors.

To be exempt under Section 195 of the Taxes Consolidation Act, 1997 the applicant’s work must be:

• original and creative; and
• have cultural merit; or
• have artistic merit.

Income earned from works which satisfy the above requirements will be exempt from income tax from the year in which the artist’s claim is made.

The Revenue Commissioners will consider a “work” to be original or creative for the purpose of the exemption scheme if it falls within one of the following categories: –

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

In accordance with the Revenue Commissioner’s guidelines for the Artist Exemption Scheme, an original and creative work is a “unique work of creative quality” from a “creator’s imagination”.

Examples of works not considered original or creative would include: –

• A book or publication to be used primarily by students in study; or
• A play or jingle written for advertising purposes; or
• An arrangement or adaptation of music which does not amount to an original composition; or
• Photographs, sculptures or drawings which are ‘utilitarian’ in function and would not have the potential to be included in an exhibition.

For a work to have ‘cultural merit’ it must by reason of “its quality of form and/or content” enhance an aspect of national or international culture to a “significant degree” .

To have ‘artistic merit’ the work must be considered to enhance a “canon of work” in the related category of works.

If necessary, the Revenue Commissioners may consult with the Arts Council or a similar person or body of persons to help them determine whether a work qualifies under the scheme. Their determination can be appealed.

Section 5 of the Finance Act 2014 introduced changes to the Artists’ Exemption Scheme as of 1 January 2015. The changes implemented increased the threshold under the scheme from €40,000 to €50,000. Also, the scheme has now been extended to not only apply to artists living in any EU Member State or EEA State. Artists’ living outside of the EU/EEA can apply to the Revenue Commissioners for an advance opinion on whether their works will come under the scheme if they become resident in the EU/EEA.

To apply for the Artists’ Exemption Scheme, an applicant must submit a form to the Revenue Commissioners together with samples of their work to which the exemption will apply. Evidence of where the relevant works has been published, produced or sold should also be included.

Contact Maria Edgeworth for more information.

Disclaimer

This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Ogier Leman for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.