If you are an artist then you may be entitled to an income tax exemption of up to €50,000 per year on profits from the sale of your works. This tax relief was introduced to encourage and preserve culture and the arts in Ireland. In this blog post, we will take a deeper look into who actually qualifies for this exemption, how to apply and some other questions you may have.
What are the exemption limits?
If it is determined that your art or work is eligible for the artist exemption, income of up to €50,000 per year will be exempt from any income tax (PAYE). Your income in this situation is your profit generated from your artwork – Income less allowable expenses. The exemption is only applicable for PAYE, you will still have to pay USC and PRSI on your profits.
This exemption is not retrospective and therefore you will not be able to reclaim income tax paid on profit made from your artworks in the past.
Who is eligible?
The exemption covers all of the following areas (with some added conditions):
- Writer (books, plays)
- Composer
- Painter
- Visual Artists
- Sculptor
But just because you are a writer or a painter does not mean you will qualify by default. Your artwork must also satisfy some further conditions, the contest must be:
Original and creative: The work must be unique and brought about from the creator’s imagination.
Have artistic merit: The work should have such quality that it adds to or enhances the artistic category it belongs to.
Have cultural merit: the content significantly enhances one or more aspects of national or international culture.
Residency: you must be a resident or ordinarily a resident and domiciled in an EU/EEA/UK.
You can check out the full guide to eligibility as laid out by the Arts Council here. This guide goes into further details an also covers some more specific rules for eligibility of non fiction books.
Who is not eligible?
The following list was set out by Arts Council as a guide to what types of works are not eligible for the exemption:
- books published for student learning, or for a business, profession or vocation ( or learning aid for the same).
- Any journalistic work published in newspapers, magazines, online or any other similar mediums.
- Any writing, visual or musical work created for the purpose of advertising or publicity.
- Any arrangement, adaption or version of musical composition that is not of enough musical significance to amount to an original composition.
- Sculpture work that is primarily practical in nature.
How to apply for the exemption?
To apply, your first step should be to complete a artists’ exemption form which can be found on revenue.ie. This will collect your personal, tax information, residency and details on what category you are applying for an exemption under ( Book/writing, play, sculpture, play, painting/picture, musical composition).
Along with this submission of the form, you will also need to send samples of your work. Here is what is required for each category:
| Catergory | Supporting Material |
|---|---|
| a book or other writing | full electronic version or one published copy of the book |
| a play | a copy of the script together with a signed copy of the production contract |
| a musical composition | links or a CD where the claimant is accredited with the music / lyrics and any other relevant information |
| a painting or other like picture | six good quality photographs of work and a brief CV of artistic career to date |
| a sculpture | six good quality photographs of work and a brief CV of artistic career to date |
Applications may be submitted to the Artists’ Exemption Unit by email to direct-taxesadmin@revenue.ie
Alternatively, applications may be submitted by post to:
Office of the Revenue Commissioners
Artists’ Exemption Unit
1st Floor
Stamping Building
Dublin Castle
Dublin 2
D02 HW86, Ireland.
If the determination is a success then you will be entitled to the exemption in the tax year that it has been granted.
Artists who get the green light from the Revenue Commissioner will be added to a database that is viewable here.
Appeals
If the determination does not go in your favour you have the right to appeal to an independent body – the Appeals Commissioner. Appeals must be made within 6 months and 30 days of your original submission.
What if I am receiving Grant Income also?
In certain circumstances if the grants awarded relate to the work you have been awarded an exemption for, then the grant income can be included in your income tax-free €50k limit.
If you have been granted Artists’ Exemption, the following payments qualify as exempt income:
- Arts Council Bursaries
- Cnuas payments made under the Aosdána Scheme
- Payments from the sale abroad of qualifying works
- Residencies paid to you directly by the Arts Council
What if I am a part time artist?
It is very common for artists to work a regular PAYE job and then also pursue their art career on the side. Your regular taxes on your PAYE job will be deducted and paid to the Revenue Commissioner by your employer, however it will be up to you to pay the taxes due on profits made from your artwork.
It is your responsibility to declare and properly report the income that you are making your artwork. Any income such as this is taxed on a self assessment basis. The forms you will need to submit will depend on the levels of your non-PAYE income.
| Tax Status | DETAIL | FORM |
|---|---|---|
| Chargeable Person | non-PAYE net income a year > €5,000 | Form 11 |
| Non – Chargeable Person | non-PAYE net income a year < €5,000 | Form 12 |
The deadlines for submitting these forms will be October 31st in the year directly following the tax year. (31 Oct 2022 for the 2021 tax year). If you have no financial background then it would be wise to get the help of an accountant to make sure you are up to date and compliant.