Q: Kevin from Meath asks – “I have heard that musicians living in Ireland do not have to pay tax. Is that correct?”

A: Kevin, this is a common misunderstanding for those not involved in the music business. In reality, musicians are liable to pay tax. Your informants have heard of the Artist Exemption, which is an exemption granted by the Revenue to certain resident artists, musicians, composers, writers and sculptors from paying Income Tax on the sale of their works. The relief is designed to encourage artists to exploit their talents in Ireland rather than abroad. For the purposes of this explanation I will discuss musicians only, although the requirements are much the same for all. For musicians, the Artist Exemption applies to Publishing income only. Therefore income received from record companies in respect of record sales, concerts, merchandising, sponsorship etc. are liable to tax.
To qualify for this exemption the musician would need to submit a claim form to the Revenue Commissioners and a sample of work i.e. a CD or tape with evidence that the work has been published. The Revenue will then assess the work for its originality and creativity, and whether it has either cultural or artistic merit. The musician would need to be resident or ordinarily resident and domiciled in Ireland at the time of submission. Interestingly, there is a mechanism whereby an individual coming to Ireland for the first time can qualify.
If you are a musician with publishing income, you should ensure that you avail of this exemption. If you have not already, I would advise consulting a reputable tax advisor who will guide you painlessly through the process.

All answers supplied by O.J. Kilkenny and Co. Chartered Accountants, specialists in the entertainment and music industry. You can contact them at [email protected] or call Michael McKenna (01) 661 1588