Call to save creative exemption in Irish tax law

November 3rd, 2005 | by aobaoill |

The Irish Arts Council is urging people to send ‘e-postcards’ to the Minister for Finance, asking him not to end the tax exemption scheme for artists.
What I find interesting about this is that the Arts Council is a government-appointed entity, though one self-described as autonomous, and with the roles of being the Irish State’s principal instrument of arts funding and an advisory body to Government on arts matters as well as being an advocate for the arts.
So, what is it that’s causing this body to so publicly challenge the government? Well, since 1969 Ireland ha exempted artists from income from their creative work. The Council’s argument in favour of continuing that situation is relatively straight-forward:

Despite the growing popularity of the arts, most Irish artists still cannot make a living from their creative work. The greatest number of beneficiaries of the scheme earn considerably less than the legal minimum wage. Artists’ earnings are subject to very considerable annual variation. The proceeds of, say, the sales from an exhibition or the publication of a book in any one year, may represent all of the artist’s significant artistic earnings for a period of three to five years.
The small number of Irish artists who have enjoyed global commercial success on an unimaginable scale are still liable for Irish tax on a significant share of their income – the only part of their income that is tax-free is the income arising from their creative work.
Artists have a unique place in society and the introduction of this tax exemption was an enlightened acknowledgement of that.

So it appears that a blanket exemption on this income may be a somewhat blunt instrument, but the Arts Council sees removal of the exemption as an even blunter solution. It should be noted, I think, that some of the high-profile cases referred to are British, or other, songwriters who have relocated to Ireland for tax purposes. While Ireland doesn’t necessarily see much (cultural) benefit from the presence of these people, nor can a calculation of tax-income foregone fairly include the figures for such people, as they wouldn’t be based here in the first place were it not for the exemption (and I wonder if we are gaining from tax on other aspects of their activities, such as performances and merchandising).
I should also mention here, of course, the exemption for income from stud fees (on horses) – where those claiming the exemption haven’t even had to make a declaration of the amount being claimed to be exempt, which has caused difficulties for the government in calculating the impact of that loophole.

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