We advise on the requirements in relation to the artists’ exemption and what is required in relation to each individual application.
The Revenue Commissioners determine that certain artistic works are original and creative works generally recognised as having cultural or artistic merit. Earnings derived from these works are exempt from income tax from the year in which the claim is made.
Guidelines have been drawn up by for determining whether a work is an original and creative work and whether it has or is generally recognised as having cultural or artistic merit.
The Revenue Commissioners can make determinations in respect of artistic works in the following categories:
- Books or other forms of writing
- Paintings or other similar pictures
Your work has to be both original and creative and to have either cultural merit or artistic merit. It is not necessary for your work to have both cultural and artistic merit – the presence of either quality is sufficient.
Where an artist receives advance royalties that are attributable to the subsequent publication of a book or other piece of writing, he or she must lodge a claim with the Revenue Commissioners in the tax year in which the royalties are paid if the royalties are to be exempt from tax.
Where a claim is received in the tax year in which the advance is received but a determination has not been granted, any tax liability arising on the advance must be paid. If a determination is subsequently granted, the Inspector of Taxes will review the artist’s liability and make any appropriate refund if tax has been overpaid.
Advance royalties that paid before the year of claim are not exempt from tax.