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Gig tax update

1 Comment 27 April 2009

Grab a seat, this is going to be a long post.

A while back a piece in the Irish Independent revealed that music artists visiting this country on tour do not pay a tax on their income similar to other countries. This in turn led to speculation as to whether or not such a tax could have a positive impact on gig prices. (i.e. If an artist has to pay a certain percentage of their cut, they may be inclined to keep the fee lower, to ensure the ticket cost stays competitive – any high earnings they would recoup would be lost to the Government anyway so high prices would not be worth it.)

Anyway, I took the matter up with Sean Sherlock, one of my local TDs and he in turn has put the question to Minster for Finance, Brian Lenihan. Here’s the text.

DÁIL QUESTION

NO. 93

To ask the Minister for Finance if he plans to implement a double taxation treaty to allow for the taxing of visiting rock bands and performers in view of the fact that they are levied in every other country in the world and revenue is being lost as a result of the failure to implement this tax; and if he will make a statement on the matter.

– Seán Sherlock.

*    For WRITTEN answer on Thursday, 23rd April, 2009.

Ref No: 15967/09

REPLY

Minister for Finance ( Mr Lenihan) :

The question of introducing a withholding tax regime on income earned in Ireland by foreign artists was examined in the late 1980’s/ early 1990’s by my Department and the Revenue Commissioners. However, because of the small prospective yield at the time, the capacity of such a regime to discourage artists visiting Ireland and the administrative burden associated with collecting a relatively small yield, it was decided not to proceed. I have asked that the matter be reviewed given developments since the last review.

I understand that while many countries have arrangements for the taxation of foreign artists it is not universal. For example I am informed that Denmark and the Netherlands do not have such arrangements.

Along with that, here’s some info on the tax situation in the UK.

When Irish bands and performers play in the UK they are taxed by the UK Inland Revenue on their fees under Article 16 of the Ireland/UK Double Taxation Treaty 1976.
They can pay up to 25pc of their fees in the UK and under the treaty some of the tax may be repayable by the Irish Revenue, which means that Ireland loses and the UK benefits.
But because Ireland has not implemented the relevant legislation, foreign performers do not pay similar taxes here — and this can mean a double loss for the Irish exchequer.

Sean Sherlock’s take on the matter can be read here. So if we are to believe that up to a quarter of artist income from a gig in the UK goes on tax is it any wonder we pay higher prices here? The artists are only too happy to charge more here, as they know they’ll get all of it, compared to the UK where there is no point in putting the costs higher, as only the UK Exchequer would reap the reward and the ticket price would be pushed to an uncompetitive level.
While Mr Sherlock will, naturally, look at the bigger picture of revenue lost to the Government, is it not time for consumer watchdogs to look at how this can hit our pockets?

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  1. Concert Tax Debate on The Last Word | Guess List - 29. Apr, 2009

    […] the risk of sounding like a broken record (following posts on the subject here and here), here’s the audio from yesterday’s (Tuesday, April 28) debate between Sean Sherlock TD […]

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