Ireland Fact-File Part 2:
Individual Business Domestic Taxation

2.13 Ireland Individual Artists Royalties

The collection of royalties by individuals

The method of collection employed for royalty payments will differ according to the activity being undertaken by the individual, but for example, in the case of musicians, the Irish Music Rights Organisation (IMRO) will act as a collection agency for royalty payments to be made to copyright holders, collecting licence revenue from businesses which use music (in broadcasting, the hospitality industry, and a number of other business types), and paying them out in the form of Public Performance Royalties.

Updated in December 2010 Income obtained by writers, composers, visual artists and sculptors from the sale of their works has traditionally been tax-exempt in Ireland, although the government has sought to restrict the scope of this exemption in recent years; from 2011, the income level to receive the relief is capped at EUR40,000.

Where works are deemed, under the 1997 Taxes Consolidation Act, to be “original and creative works generally recognised as having cultural or artistic merit”, the income derived from such works can be exempted from tax in the year of the claim (subject to the restriction discussed above).

The decision as to whether the work in question fulfils the above criteria is made by the Revenue Commission, using guidelines drawn up by the Arts Council and the Minister for Arts, Sport and Tourism.

Works which can be considered for exemption are outlined by the Revenue as follows:

1. a book or other writing;
2. a play;
3. a musical composition;
4. a painting or other like picture, and
5. a sculpture.

In order to claim the Artists Exemption, the individual creator must be resident, or ordinarily resident and domiciled, in the Republic,  and must not be resident elsewhere.

Artists' exemption claim forms plus samples of the work – defined as 3 published copies of a book; a copy of a the script with a signed production contract (in the case of a play); CDs or cassettes on which claimant must be accredited (in the case of a musical composition); or 8 to 10 good photographs or slides (in the case of a painting or similar work) – evidence of sales, and supporting testimonials, where appropriate, should be sent to:

Office of the Revenue Commissioners,
Income and Capital Taxes Division,
(Artists Exemption Unit)
1st Floor, New Stamping Building,
Dublin Castle,
Dublin 2,
Ireland.

Where the individual creator receives advance royalties, relating to the subsequent publication of the work for which they wish to claim, they must lodge said claim with the tax authority in the tax year in which the royalties are paid if the royalties are to be exempt. The work's publisher must confirm that the book will be published.

Advance royalties paid before the year of claim will not be exempted.

From January 2007, special provisions were put in place with regard to high income individuals and this exemption, meaning that artistic income is regarded as a "specified relief" which may be affected by High Income Individual Restriction; further details on this for 2010/11 can be found here.

Withholding tax rates for royalty payments are generally 20%, unless a double tax treaty reduces this rate, or there is a scheme in place exempting the income in question from tax, as with the Artists Exemption Scheme.

There is additionally a 23% Professional Services Withholding Tax imposed on payments made by some government and public bodies to contractors.

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

Ireland Artist Tax Guide

Ireland Contractor Tax Guide

Ireland Entrepreneur Tax Guide

Ireland Professional Tax Guide

Ireland Small Business Tax Guide

Ireland Sportsperson / Entertainer Tax Guide

Fact-File

Part 1: Business Formation for Individuals

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