Tax exemption for artists 'undermined' by celebrities
The long-running writers and artists tax exemption looks set for a major overhaul, the Irish Independent has learned.
A Department of Finance spokesperson has confirmed a "desk-based review" of the scheme is currently under way, as preparation for the Budget gathers pace.
Sources suggest the tax break could be completely abolished, or the tax-free income threshold - currently at €50,000 - could be sharply reduced.
The scheme, which cost taxpayers €21m in 2008 and €6m in 2013, was introduced in 1969 by then Taoiseach Charles Haughey.
It encouraged various people in the "creative industries" to come to Ireland, while also nurturing home-grown talent.
Native Irish writers, as well as painters, sculptors and some of those involved in the theatrical field, have benefited from the tax-free arrangement.
Some of the big names involved included the late Maeve Binchy. Writer Cecelia Ahern and singer Sinead O'Connor have also benefited from the scheme.
It is understood one option being considered by Finance Minister Michael Noonan is to reduce the tax-free allowance of some high earners in the artistic field.
Last year, the EC ruled the levy relief was in breach of EU law on freedom of trade. This is because it is only offered to Irish nationals.
As a result, Mr Noonan opened the scheme to other EU residents to avoid potential infringement proceedings.
However, Revenue has now advised the minister to look at closing the scheme, which costs about €270,000 a year.
The tax authorities insist the scheme is no longer helping "struggling artists".
"It is probably fair to say a sizeable number of the claimants would have produced their work regardless of whether the exemption was available or not," said a briefing note to the Department.
It has been argued that the exemption scheme has been "undermined" by celebrities, singers, sport stars, and high-profile figures making use of it for their autobiographies, including former Taoiseach Bertie Ahern.