Artists' tax deal faces review over €50k 'loophole'
'Literary merit' of celebrity memoirs questioned
Published 24/07/2016 | 02:30
The special deal for writers and artists - which has allowed well-known names such as singer Mary Black and jockey Ruby Walsh to earn up to €40,000 tax free from writing their life story - looks set for a major overhaul.
The Department of Finance is conducting a review of the Artists' Tax Exemption scheme as preparation for the Budget gathers pace, the Sunday Independent has confirmed.
It could mean various high-profile Irish celebrities will no longer be able to earn a tax-free income when they publish a memoir or an autobiography.
Sources suggest strict new guidelines may be on the way to determine whether or not a book has "artistic merit".
It has also been speculated the tax break could be abolished completely, or that the threshold - currently at €50,000 - might be reduced.
This could apply to writers, composers, visual artists and sculptors, arising from earnings gained from a particular piece of work. However, it has been argued the original purpose of the scheme has been "undermined" by entertainers, singers and sport stars, who have been eligible for the allowance, arising from works which, strictly speaking, are not of artistic or literary merit.
Former Taoiseach Bertie Ahern is among those who benefitted from the exemption, when he published his memoirs in 2009.
Among the other well-known names who availed of the relief is his hugely successful novelist daughter, Cecilia. Others on the list of those who benefitted from the tax exemption, as published by the revenue authorities, include former RTE personality Charlie Bird, and Donal Og Cusack of Cork hurling fame.
About 10pc of claimants currently have an annual income in excess of €100,000.
The exemption, introduced in 1969, was designed to attract artists to settle in Ireland, while also nurturing home-grown creative talent.
When announcing the introduction of the scheme in his budget speech, the then Finance Minister, Charles Haughey, said it would encourage "creative artists in our midst".
In 2011, a cap of €40,000 per annum was placed on the amount of income which would be exempt from tax. From January last year, this threshold was increased to €50,000.
The 2009 report of the Commission on Taxation, argued that the scheme should be abolished on "equity grounds".
A Department of Finance internal review of certain tax schemes, published in 2006, also had considered abolition, but decided such a move could have a detrimental impact on the development of the arts in this country.
Latest figures show the arrangement cost taxpayers €5.3m in 2013, with 2,580 people availing of the scheme.
This compares with €4.8m in 2012, when 2,490 avoided tax on their earnings, by adhering to existing rules.