Are books without artistic merit being given tax exemptions they don’t deserve? The bodies that are supposed to decide on such things can’t seem to agree
For many, the decision of the Revenue Commissioners to grant former taoiseach Bertie Ahern a tax exemption for his autobiography, which was published in 2009, represented the nadir of the present artist-exemption scheme.
The scheme, which was introduced by Charles Haughey in 1969 and refined in 1973, has been largely popular, but that admiration does not extend to the criteria that allow the authors of nonfiction books to qualify for tax breaks.
The Revenue Commissioners’ guidelines relating to Section 195 of the Taxes Consolidation Act 1997 are quite specific. Appendix A of the guidelines state that in order for nonfiction books to qualify, they must be on an artistic theme and cover “fiction writing, drama, music, film, dance, mime or visual arts, and related commentaries by bona fide artists”. They must also shed new light on the subject.
The appendix lists in detail the types of works that might qualify. They are “arts criticism, arts history, arts subject works, arts diaries, autobiography, belles-letters essays, biography, cultural dictionaries, literary translation, literary criticism, literary history and literary diaries”. There is a separate category for books about archaeology, heritage and material based on the national archives.
Ahern’s book is an autobiography, but it has nothing to do with the arts. Neither do the autobiographies of the Irish rugby star Ronan O’Gara, or many other sports books that have qualified for the exemption. How do The Fresh Water Birds of Ireland, A History of Bord Na Móna or David McWilliams’s bestseller The Pope’s Children meet the Revenue Commissioners’ criteria for inclusion?
The Arts Council is the gatekeeper of the process. It advises the Revenue Commissioners on whether a book should qualify for the exemption and gives expert advice on appeal (authors may appeal the initial decisions). Yet the Revenue did not refer Ahern’s autobiography to the council for assessment.
Appealing assessments
Between January 2011 and November 2012, the council advised the Revenue Commissioners of 133 submitted books that it believed should not be eligible for the artist exemption, according to documents supplied under the Freedom of Information Act.
Appeals are judged by an independent commissioner appointed by the Revenue. In cases where writers have appealed, the Arts Council has a poor record. Some 26 of the 46 cases sent to appeal between 2004 and 2011 were successful for the author; only 19, or 41 per cent, were upheld by the commissioner. There is one decision pending.
It is no more than a “pass rate”, according to Stephanie O’Callaghan, the arts director of the Arts Council. She says the decision to grant tax-exemption status to Ahern’s book gave the impression that the Arts Council had somehow approved of that decision when the opposite was the case. It also set a precedent.
“The last time I checked, rugby, GAA and politics weren’t included in the act. There is no ambiguity in the Arts Council about eligibility. Our interpretation of biography and autobiography is clear: it has to be about artists by artists. It is very clear in the guidelines,” she says.
“It is a very particular support to artists and to start tinkering with it and broadening those definitions is quite a significant departure from the original purpose.”
Internal Arts Council emails reveal a degree of frustration about the process.
In the past year the council has been waiting for Minister for Finance Michael Noonan to approve new guidelines set by Minister for Arts, Heritage and the Gaeltacht Jimmy Deenihan in December 2011. There has been correspondence between the two Ministers but no decision yet. The Department of Finance says one is imminent. A spokeswoman for Deenihan says the Minister is engaged in a “deliberative process” and that “no further comment can be made at this time”.
The Arts Council has told the Revenue Commissioners that it does not have the resources to provide an expert witness every time there is an appeal.
Toby Dennett, the head of artists’ supports at the Arts Council, says the appeals commissioner has been ignoring Appendix A of the guidelines and referring instead to the basic criteria of “artistic merit” and “creative and original”, concepts that are difficult to argue at appeal.
In an internal email seen by The Irish Times, Dennett says adverse judgments against the Arts Council’s advice “undermine the scheme as a whole and provide another stick for anyone intent on campaigning for its abolition”.
A letter from the director of the Arts Council, Orlaith McBride, to the Department of Arts, Heritage and the Gaeltacht, appears to indicate that Noonan is considering excluding all autobiographies and biographies from the process. The council would not favour such a move. It could mean works of merit, such as Edna O’Brien’s Country Girl and Terence Brown’s The Life of WB Yeats, could be excluded from the scheme.
Award for excellence
Poet Theo Dorgan, who is a member of the artists group Aosdána, which was established by the Arts Council in 1981, says Aosdána could provide the expert advice necessary to the Revenue Commissioners, to ease the burden on the Arts Council.
He maintains the artist exemption should in itself be an award for excellence similar to that which allows somebody to become a member of Aosdána, and not something that is given as a matter of course. “Not everybody who plays hurling can get an All-Ireland medal. If these things are not genuine honours, they risk becoming meaningless.”
Fellow poet and Aosdána member Anthony Cronin, who was critical of the decision to grant Ahern’s book tax exemption, says either the Revenue Commissioners should adhere to its own guidelines or the legislation should be changed.
“The Arts Council definition of cultural importance is perfectly right and the Revenue Commissioners are wrong. If somebody wants to come along and amend the act to include this, that and everything, that is fine, but the spirit of the original tax exemptions was on cultural importance, in the sense of which the Arts Council use the phrase.”
Exemption redemption Does the scheme work?
Correspondence published by The Irish Times this week highlighted misgivings within the Arts Council with regard to the number and type of nonfiction books that qualify for the artists’ exemption scheme, which relieves artists from paying tax on the proceeds of original works. (My own book availed of the scheme.) A cap of €40,000 was introduced in 2011.
Below, some Irish writers give their views on whether the scheme is fit for purpose.
DERMOT BOLGER Writer, former member of the Arts Council
“The Arts Council is right to be worried as the exemption has been given to frivolous books of no literary merit. It therefore gives the public a very false impression of writers’ lives. The scheme has been vital for literary writers such as myself. I finished a novel this month that I spent eight years writing. If the advance were taxed, it would be on one year’s earnings.”
SELINA GUINNESS Author of a memoir, The Crocodile by the Door, which is shortlisted for the Costa Book Awards
“I have applied and I am waiting to hear the outcome. If the Arts Council is holding firm to the odd idea that a nonfiction book has to be about the arts to qualify, that rules out a whole range of books. I got a bursary from the Arts Council to help with my book, which took me five years to write. The bursary allowed me to pay for childcare but when averaged out it amounted to €2,000 to €3,000 a year. I pay income tax on every other aspect of my work and the exemption applies only to my book. Book publishing is a shrinking industry, and the scheme provides a way of recognising its importance.”
JOHN BANVILLE Novelist and winner of the Man Booker Prize
“It was brought in, as far as I can recall, for creative writing. The problem is that term is very broad. You could say an accountant’s report is creative writing. It is a very ambiguous area and very hard to decide . . . It should be good books that get it. The scheme itself is a huge help. I worked most of my creative life as a journalist and I earned a living but people who have not got that rely on the exemption and it has helped a lot of people. Some couldn’t live without it.”
PAUL LYNCH Author of Red Sky in Morning, which is due out in April
“I will apply for it. Having made the move from
journalism to full-time writing I think it is essential, because you are never really guaranteed when you will get paid. I got a book advance and I can live off that. But I don’t know if I will make money next year, or the year after that.
“How do you draw the line between what is artistic and what is not? A well-written autobiography has artistic merit. I think if people are supporting themselves solely from their writing, there is a genuine case to be made.”
EOIN PURCELL Commissioning editor at New Island Books
“The criteria look a bit broad. But I’d rather it was broad and we made mistakes giving it to people whom we could argue over, rather than make it narrow and it end up being a very elitist thing. It would be nice if we could figure out a tool to make it target emerging writers and artists.
“It is not a crazy investment and if we sometimes get it wrong, then it is a small price to pay for people whose works may be remembered in years to come.”
- BRIAN O’CONNELL
