An artist (i.e. a creative writer, musical composer, painter, or sculptor) can claim exemption in respect of income from an original and creative work of art. The work of art may be:

• a book or other writing,
• a play,
• a musical composition,
• a painting or other like picture,
• a sculpture.

Exemption is obtained when the Revenue Commissioners make a determination that an individual has created an original and creative work generally recognised as having cultural or artistic merit (see notes to (12) below).

The exemption applies to an individual who is resident in one or more EU Member States or in another EEA State (or ordinarily resident and domiciled in such a State) and not resident elsewhere.

Artistic exemption must be claimed. A claim may be made in respect of general work or a single work.

Once Revenue have made a determination that artistic exemption applies, income arising from the publication, production or sale of the work (and work in the same category) is exempt from tax provided the income is below the €50,000 annual limit.

The exemption does not apply for tax years before the tax year in which you claim the exemption.

Example

You have just completed your first novel and you are due to receive an advance of €15,000.

You apply to Revenue for tax exemption in respect of income from your writing. Revenue request copies of the book, and grant the exemption.

As the €15,000 is below the €50,000 exemption threshold, the advance is not subject to income tax, but it is caught for USC (section 531AN) and PRSI.

Where a claim is made in respect of general work, Revenue may ask for documents, information or other evidence they need to decide entitlement to the exemption.

Where a claim is made in respect of a particular book, play or musical composition, the claimant must supply the Revenue Commissioners with three copies of the work.

Where a claim is made in respect of a particular picture or sculpture, the claimant must facilitate the Revenue Commissioners to view the work.

Revenue may write to a claimant requesting production of royalty statements and any other books or accounts relating to the publication, promotion or sale of the artistic work.

If Revenue have not made a decision within six months of having received an artistic exemption claim, the claimant may appeal.

The appeal may be made within 30 days after the end of the six months period, but only if all Revenue requests for evidence to support your claim have been complied with.

The Appeal Commissioners may determine whether you have created an original and creative work having cultural or artistic merit. They may consider evidence and consult experts to help them make their decision.

Business expenditure that applies to both the exempt artistic activity and a fully chargeable activity may be apportioned by Revenue between the two activities.

Example

If you are a writer, half of whose income derives from writing newspaper articles, and half of whose income derives from writing novels, business expenditure on computer programs etc, printing paper etc. may be apportioned by Revenue between the two activities.

Although artistic income is exempt, the claimant must file a tax return.

The Arts Council and the Minister for Arts may produce guidelines as to what art works are original and creative, having cultural or artistic merit. These guidelines may list works that would not be regarded as original and creative.

According to these guidelines, a work has cultural merit if its contemplation enhances the quality of individual or social life by virtue of that work’s 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.

A work need not have both cultural and artistic merit: the presence of either quality is sufficient.

The term original and creative encompasses any unique work which is brought into existence for the first time as an independent entity by the exercise of its creator’s imagination.

A non-fiction book or other writing is considered original and creative only if it comes fully within one or more of the following categories:

• The terms of reference of the Arts Council for fiction writing, drama, music, film, dance, mime or visual arts, and related commentaries by bona fide artists: arts criticism, arts history, arts diaries, autobiography, belles-lettres essays, biography, cultural dictionaries, literary translation, literary criticism, literary history, literary diaries.
• The terms of reference of the Heritage Council, including works relating to archaeology and publications associated with items or areas of significant heritage value.
• The terms of reference of the National Archives Advisory Council. Publications which relate to the archives which are more than 30 years old concerning Ireland, and are based largely on research from such archives.

In addition, the essence of the work must be the presentation of the author’s own ideas or insights in relation to the subject matter, and the ideas or insights are of such significance 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.

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

• A book or other writing published primarily for, or primarily for use by, students or persons 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 consisting of a series of articles by the same author connected by a common theme and therefore capable of existing independently in its own right.
• A play written for advertising purposes which does not exist independently in its own right by reason of quality or duration.
• A musical composition written for advertising purposes which does not exist independently in its own right by reason of quality or duration.
• Arrangements, adaptations and versions of musical compositions by a person other than a bona fide composer who is also actively engaged in musical composition.
• Photographs or drawings (other than a set or sets of photographs or drawings that are collectively created for an artistic purpose) which are mainly of records, or which serve a utilitarian function, or which would not exist independently in their own right by reason of quality or by reference to their potentiality for inclusion as part of an art exhibition.
• Objects which are primarily functional in nature, objects produced by processes other than by hand, objects produced by hand by persons other than those actively engaged as bona fide artists in the field of the visual arts.

Unless a work complies with the Arts Council guidelines, Revenue are not permitted to decide that it is original and creative, or that it has artistic or cultural merit.

If first published, produced or sold after 3 May 1994, a work in the same category as a work for which exemption has previously been granted does not qualify for artistic exemption unless it complies with the Arts Council guidelines.

Example

If you are a writer who was previously given artistic exemption for royalties from a school textbook, “A”, royalties arising after 3 May 1994 from sales of a newly published school textbook, “B”, in the same category as “A”, are not exempt.

The Revenue Commissioners must supply any applicant with a free copy of the Arts Council guidelines.

Revenue may publish the names of person who have been granted artistic exemption, together with the category and title of the their work.

Note

Tax Checklists: p11.

Precedents

The guidelines reverse the effect of decisions in Revenue Commissioners v O’Loinsigh, [1994] ITR 199 where exemption was given to an author of school history text books, and Forde v Revenue Commissioners, 4 ITR 348, where exemption was given to an author of legal books.

A full time journalist was refused relief in respect of income from writing newspaper articles: Healy v Breathnach, 3 ITR 496, [1986] IR 105.

Tax Appeals Commission

Not exempt: 04TACD2018; 20TACD2017; 15TACD2016; 02TACD2019; 112TACD2020; 26TACD2020; 05TACD2020.

Exempt: 21TACD2017; 20TACD2016; 17TACD2016; 118TACD2020; 19TACD2020; 18TACD2020.