Though Ireland does not have general legislation aimed at stimulating arts sponsorship or investment, there is a range of tax reliefs in operation to incentivise such activity. For instance, Section 481 of the Taxes Consolidation Act (1997) allows investors in film or television drama to claim tax relief on share subscriptions in qualifying film production companies. The amount of relief that can be claimed is subject to annual limits. A new film tax scheme was commenced in 2015.
Section 1003 of the Taxes Consolidation Act (1997) enables tax relief for persons who donate important national heritage items to the Irish National Collections. In addition, other tax breaks can be availed of to support cultural organisations:
- business sponsorship of an artist or arts organisation in exchange for promotion of the business;
- donations to charitable institutions;
- expenditure on buildings and gardens;
- gifts to the Exchequer; and
- provision of certain goods and services such as printing of programmes or tickets, offering airline tickets, etc.
The 21.5% VAT charge on visits by foreign performing artists to Ireland continues to be burdensome for festivals and other organisations, as well as discouraging exchange between North and South, as the same tax does not apply in the UK.
Generally, the usual VAT rate of 21.5% is reduced to 12.5% in respect of sales of art works and admission to artistic and cultural exhibitions. The general position of Revenue Commissioners (the governmental agency responsible for customs, excise, taxation and related matters) is that the printing of books qualifies for the zero rate of tax while the printing of newspapers and periodicals attracts VAT at the second reduced rate. Other printed matter including stationery are liable at the standard rate. The second reduced rate, currently 9%, was introduced on the 1st July 2011 and still applies.
Artists in Ireland benefit from a specific tax provision. Tax-exempt status for self-employed creative artists resident in Ireland was introduced in the 1969 Finance Act. This provision was lauded internationally as an imaginative piece of legislation. It allows exemption from tax on income earned by creatives (writers, visual artists, sculptors and composers) in Ireland so long as it meets certain criteria. This would include income from sales or copyright fees in respect of original and creative works, as well as on Arts Council bursaries, payments of annuities under the Aosdána scheme and foreign earnings. Revenue Commissioners along with representatives of the Arts Council will make a determination on creative works’ eligibility. Works eligible include: books or other forms of writing; plays; musical compositions; paintings or other similar pictures; and sculptures. Income derived from the performance of works is subject to normal taxation. The work must be of artistic merit. The artist’s work is qualified as having artistic merit if “it enhances to a significant degree the canon of work in the relevant category in its quality of form and/or content”.
From the tax year 2011, the artist’s exempt income is subject to Universal Social Charge at the appropriate annual rates. Artists’ income exempted under the scheme may be subject to Pay Related Social Insurance, VAT and the Higher Earners Restriction. In 2014, the provision was revised with a cap placed on the exemption on the first EUR 50 000 of profits or gains. As a self-employed worker, the artist is entitled to claim back some VAT paid for materials costs. The scheme has recently been extended to EU non-resident artists.