Irish writers, sculptors and painters saw their earnings increase in 2015, as the amount of tax relief claimed under the artists’ exemption scheme almost doubled to €10.8 million.
Latest figures from the Revenue Commissioners show the exemption resulted in tax relief being granted of €10.8 million in 2015, up by 86 per cent on 2014. However the number of artists successfully applying for the exemption only rose slightly, by 8 per cent to 2,840, indicating that artists must be reporting higher income figures. Figures for 2016 are not yet available, as income tax returns for 2016 are not due to be filed until October 2017.
Under the scheme, artists can apply for an exemption from income tax (not PRSI or USC) on earnings from an approved work for one year of up to €50,000. However, not all artists will earn enough in a year to benefit from the full tax exemption.The most that can be saved in tax in one year through the scheme is €20,000.
Based on the figures, the average relief earned in 2015 was €3,802, indicating earnings of €19,010 per artist from a work of art in that year based on a 20 per cent tax rate, or €9,505 based on the higher rate of 40 per cent. Figures for 2014 suggest the average relief was just €2,196, signifying average earnings of €10,984, or €5,490, depending on the tax rate.
While the average figures may be swayed by higher tax savings by higher earnings, the most an artist can save from the scheme is €20,000, if they were to pay tax at the higher rate.
However, while the figures are rising once more, it’s a far cry from years gone by when artists could avail of an uncapped exemption; in 2006, for example, the scheme cost the exchequer almost €66 million in tax revenue foregone, with 2,890 artists claiming relief of an average €22,802 each.
Earnings can vary significantly for Irish artists. While Paul O’Connell’s The Battle, written with Limerick journalist Alan English – who incidentally doesn’t feature on the exemptions list – may have grossed more than €1 million in sales, many artists will make a minimal return for their efforts. The most recent survey of Irish authors’ incomes, for example, published by the Irish Copyright Licensing Agency in 2010, found that in 2008-09 more than half the writers consulted earned less than €5,000 from writing-related income, with more than a quarter earning less than €500 a year.
Sales of books have started to recover in Ireland after years of decline. In 2016, for example, book sales rose to €131 million, the highest level since 2011.