Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

We discussed the issue, the principle, the background and the information that led Senator Mullen to put this recommendation forward on previous Stages. We had quite a detailed discussion and the Senator provided a lot of information on the matter.

Section 195 of the Taxes Consolidation Act 1997 provides for the exemption of certain earnings of writers, composers and artists and allows the Revenue Commissioners to make determinations in respect of artistic works in the following categories only: a book or other writing; a play; a musical composition; a painting or other like picture; and a sculpture. Guidelines were drawn up by the Arts Council and the then Minister for Arts, Heritage and the Gaeltacht, for determining whether a work which falls within the scope of the activities listed in the section is an original and creative work and whether it has, or is generally recognised as having, cultural or artistic merit and consequentially can qualify for the exemption. For most categories of work, once a determination is made by the Revenue, the exemption will apply not just to the works submitted with the application but also to any future works in the same category. In these instances, an individual need only make a fresh application if the category of their work changes, for example, from books to music. The exception to this process is where the works in question are non-fiction books. Due to the restrictions imposed by the guidelines governing the scheme on non-fiction books, it is necessary to submit a new application in respect of each new non-fiction work to ensure it comes within the eligibility criteria set out in the guidelines.

There have been three legislative changes to section 195 of the Taxes Consolidation Act included in two Finance Bills in the past 15 years. Two of these changes concerned the maximum amount of exempt income allowed under the scheme and the third change was made on the foot of infringement proceedings being threatened by the EU Commission. This change expanded the eligibility for the scheme to residents of all EU and EEA countries, where previously it was only open to residents of this State. As stated by the Minister for Finance at the time, the policy basis of the artists’ exemption is to provide "further encouragement to the creative artists in our midst and to help create a sympathetic environment here in which the arts can flourish".

On the issue of excluding certain public representatives and public servants from the scheme, I do not see how it is relevant to the objective of the measure to exclude a person solely on the basis of their former employment. As a general principle of tax equity, the source of other income should not determine the tax treatment of the income from an artistic endeavour. As I am sure the Senator will agree, artistic inspiration and talent can be found in all sorts of unexpected places - even among retired public servants and public representatives, as I mentioned previously.