Cecilia Keaveney (Donegal North East, Fianna Fail)
Link to this: Individually | In context

Question 288: To ask the Minister for Finance the tax incentives that exist to support the development of a school of music; and if he will make a statement on the matter. [7170/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that there are no specific tax incentives available for the development of schools of music. However, if a school of music is being run as a business and generating taxable income, the general position under tax law is that expenses that are incurred wholly and exclusively for the purposes of the business are deductible in arriving at taxable profits. Relief is also available for capital expenditure incurred on items regarded as plant and machinery that are used for the purposes of the business.

Tax relief, in the form of capital allowances, was previously available for expenditure incurred on the construction and equipping of buildings used for the purposes of third level education. It was, therefore, open to a third level educational institution with a music department or school of music to avail of this scheme. In line with property incentives generally, the scheme which provided relief to investors in third level educational facilities, is now being phased out and will finally end on 31 July 2008. However, for new projects it has already come to an end and the July 2008 deadline applies only to pipeline projects meeting a number of transitional conditions.

In addition, Section 848A (Part 2 of Schedule 26A) of the Taxes Consolidation Act 1997 provides for tax relief on donations to approved bodies which have been granted approval for education in the arts. Relief from either income tax or corporation tax applies where an individual or company make a donation of money, of at least €250 in a tax year, to an "approved body" for the purpose of assisting that body to promote the advancement in the State of an "approved subject". Subject to certain conditions there is no upper limit on the amount that can be donated.

An "approved body" is a body approved the Minister for Finance for the purposes of the section, which is essentially a third level college, university or other body concerned solely with the advancement in the State, on a national or regional basis, of one or more specified "approved subjects" and cannot distribute its profits or assets to its members.

The "approved subjects" are actually listed in the legislation but can and have been added to by the Minister for Finance. The list of approved subjects appearing in the legislation is as follows:

(a) the practice of architecture,

(b) the practice of art and design,

(c) the practice of music and musical composition,

(d) the practice of theatre arts,

(e) the practice of film arts, or

(f) any other subject approved of the purposes of this section by the Minister for Finance.