Irish tax law allows artists and writers to apply for income tax exemptions on earnings from certain creative works. This exemption, first introduced in 1969, originally had no income cap, but now applies only to earnings up to €50,000 annually. Decisions on qualifying works are based not only on legislation but somewhat unusually, also on guidelines developed by the Minister for Culture and the Arts Council—placing Revenue (in conjunction with the Arts Council) in the position of having to assess the artistic merit of a work, and on occasion, what is or is not art.
Section 195 of the Taxes Consolidation Act 1997 (TCA 1997) is entitled ‘Exemption of Certain Earnings of Writers, Composers, and Artists.’ It goes on to define a ‘work’ for the purposes of the legislation as one that is ‘original and creative’, and which falls into one of the following categories:
- A book, or other writing
- Plays
- Musical compositions
- A painting, or other like picture
- A sculpture
Already one can think of many forms of art that would not fit neatly into these categories. Performance and video art for example. Furthermore, definitions of what constitutes a painting, play, or sculpture have evolved considerably in the artworld over the last few decades. In The Tax Appeals Commission decision 08TACD2024 for example, the fact that a work had once been worn as part of a performance, initially caused it to be declared utilitarian in nature, and therefore not subject to the exemption. on appeal, the artists successfully showed that the work, although capable of being worn, was in fact primarily a piece of sculpture which existed in a gallery. its delicate nature precluded any realistic wearing. I think more importantly, and not quite expanded upon in the judgement, the wearing of the piece was for a performance, and therefore the wearing was a part of the work of art in a conceptual way.
If the first hurdle of ‘category’ is passed, you must then satisfy the Revenue that your work is original and creative. Finally, you must satisfy them that the work has, or is generally considered as having, cultural or artistic merit.
As previously mentioned, under section 13 of the TCA1997, the Revenue must make sure that the work complies with the Guidelines before determining whether a work is original and creative, and whether it has cultural or artistic merit. The Revenue may also ask the opinion of the ARts Council, and it would appear that they often do.
The Guidelines are relatively short, but quite stringent. Paragraph 4 states:
A work shall be regarded as original and creative only if it is a unique work of creative quality brought into existence by the exercise of its creator’s imagination.
Paragraph 5 goes on to state:
A work shall be regarded as having cultural merit only if by reason of its quality of form and/or content it enhances to a significant degree one or more aspects of national or international culture.
And 6:
A work shall be regarded as having artistic merit only if its quality of form and/or content enhances to a significant degree the canon of work in the relevant category.
I think there are problems first of all with the word “unique”. I am unsure what it means for limited edition prints for example. And the word ‘imagination’ may be confining too. although from a perusal of the tax appeals commission’s decisions, this does not appear to cause many problems. In the Copyright Act, a work need only be original and fixed. I am unsure why here, things are muddied with words like ‘unique’ and ‘imagination’.
And then, there is the quite surprisingly high bar that needs to be reached in relation to enhancing, to a significant degree, aspects of national or international culture, or the canon of work in the relevant category. I would submit that the vast majority of art, literature, and music created each day, although perhaps of high quality, very very rarely significantly enhances the canon of work in the relevant category.
In 19TACD2024, the Tax Appeals Commissioner points out that statutory interpretation rules means that they must interpret the words in the Guidelines in their ordinary meaning as much as possible. She goes on to say:
“ the definition of “canon of work” as contained in the Cambridge dictionary is “the writings or other works that are generally agreed to be good, important, and worth studying”.”
To take painting as an example, the works generally agreed to be good, important, and worth studying would surely include all of the masters of the Renaissance, the Modernist painters of Paris and London in the 19th and 20th Century, the Abstract Expressionists of New York etc. The artists in art history books, or even contemporary well-known artists. How is a painter working in Ireland today, supposed to argue that their work, enhances to a significant degree this canon. It seems a very big ask; Unnecessarily so. This high bar does preclude artists from availing of the exemption, and brings in an unfortunate degree of subjectivity.
To continue with the Guidelines, non-fiction writing may be acceptable if for example it is criticism or a biography that incorporates the Authors own insights and “is regarded as a pioneering work and also makes a significant contribution to the subject matter by casting new light on it or by changing the generally accepted understanding of it”. Therefore, you simply have to write the definitive book on the subject, and uncover previously unknown insights, to qualify for the exemption.
Finally, the Guidelines set out types of works that are excluded. These include, works created for the purpose of study, journalism, or advertising. Also, sculptures that have primarily a utilitarian or decorative purpose.
This scheme is to be lauded as providing artists with the possibility of tax exemptions on earnings for their work. I am unsure however, what the necessity is for the merit part of the Guidelines. In copyright law, it is sufficient that the work be original, and fixed. It does not matter whether the quality is any good. The need for the Revenue to make decisions on the artistic or cultural merit of a work is not only subjective, but unnecessary. Whether a work is utilitarian or decorative seems to me to be a sufficient control on applications without the need for a merit test. I would imagine that arguments about the decorative nature of some art would be difficult enough. If someone creates art, and makes money from it, and the Government wishes to encourage this through tax exemptions, I don’t see what point a merit test has, especially as it seems to me that a truly strict interpretation of the wording used in the Guidelines would be nearly impossible to satisfy.
as I write this, the National Gallery of Ireland has a show on featuring two pioneering artists in ireland in the 1920s, Evie Hone and Mainie Jellett. They are rightly being presented as being instrumental in the development of Modernism in Ireland, and as being ahead of their time. Their art was met with quite a strong reaction, and often not a favourable one. George Russell, artist and critic described Jellett’s ‘Decoration’ as ‘Artistic Malaria and sub-human art’. The curator of the exhibition now describes it as ‘arguably the most significant Modernist painting in the history of Irish Art’. If Jellett had applied for the Exemption at the time, I wonder if she could have satisfied the Arts Council that her work significantly enhances the canon.
It is interesting that it is often in the realm of tax that the definition of what art is, crops up in a legal setting. Brancusi’s ‘Bird in Flight’ Sculpture initially attracted an import tax of %40 (artworks generally had no import tax) because it was decided that it did not come under the definition of a sculpture. Brancusi was successful in his case in the 1920s.
Dan Flavin was not successful at an EU level however in 2010, when his artworks consisting of Neon lightbulbs were deemed light fittings and as such attracted a higher VAT level. This was a bizarre decision which flew in the face of the art-world’s general consensus on the sculptures.
https://www.irishtimes.com/culture/the-tax-break-that-makes-art-possible-1.352941
Art Law in Ireland 