Tax exemption scheme allowed 28 artists save over €32.5m

TWENTY EIGHT of the country’s artists who have incomes over €1 million saved a total of more than €32.5 million in 2006 under the tax exemption scheme for artists.

Minister for Finance Brian Lenihan said that an estimated 2,890 artists availed of the exemption scheme in 2006 – the most recent year for which figures are available – at an estimated cost to the exchequer of €66 million.

Since then, the tax break has been substantially curbed. An amendment to the scheme in 2007 capped earnings at a maximum of €250,000 per annum after which tax becomes due.

According to an analysis by the Revenue Commissioners, the 28 super-rich artists claimed exemption at the 41 per cent tax rate on gross income totalling €77,931,694.

The analysis shows that 21 artists earning between €500,000 and €1 million claimed on earnings totalling €14.3 million and saved themselves €5.9 million in tax.

There were 27 artists earning between €250,000 and €500,000 and they claimed on earnings totalling €9.2 million, saving themselves €3.8 million.

In the €100,000 to €250,000 income bracket, 129 artists wrote off a tax bill of €7.5 million on earnings totalling €19.7 million.

The Revenue analysis shows 1,366 artists, almost half the total, were earning less than €10,000 a year and the tax lost to the State as a result of their claims was less than €1 million.

Providing details of the cost of the scheme to Fine Gael finance spokesman Richard Bruton in answer to a written Dáil question, the Minister said that a breakdown of the figures by artistic category was not available.

Artists can claim the exemption under five categories: a book or other writing, a play, a musical composition, a painting or sculpture. In 2006, the scheme was unique in the world for allowing artists to keep all of their earnings, although they did pay PRSI.

It was introduced by the late taoiseach Charles Haughey in 1969 to help struggling artists and to show that the country valued creative people.

The identities of recipients of the tax break remained secret until 2002, when it was decided to name those who had applied for the exemption from 1998 onwards.

International stars such as rock groups U2 and the Corrs, singers Enya and Chris de Burgh and bestselling authors have not been named as recipients by Revenue, even though they are believed to have used the scheme prior to 1998.