NO WITHHOLDING TAXES FOR FOREIGN ENTERTAINERS

Ireland is one of the few EU countries that doesn’t tax visiting entertainers performing in Ireland – and now the Revenue has confirmed it simply isn’t worth doing so.

According to The Sunday Business Post, the Revenue says pursuing “big-name stars” wouldn’t make sense because it would generate such a small amount of income for the economy. It might even have a detrimental effect.

“If changes in taxation were significantly onerous, they could discourage ‘big-name stars’ from working here. This could have knock-on effects in areas such as film-making or international sport,” the Revenue said.

A Revenue review also justified the current policy by describing Vat revenues generated from entertainment events as “significant”, claiming such income to the state coffers could be jeopardised if a withholding tax was brought in.

“At a minimum, a small dedicated team of between five to seven staff would be required, at a wage cost of approximately €300,000 per annum. The cost of administering a scheme would need to be considered against any prospective yield of perhaps €2 million,” the review said.

Ireland, Denmark and the Netherlands are the only three EU countries that don’t tax profits on events. The UK has a 20% rate and the US takes 30%.

The Department of Tourism, Culture and Sport had told the Revenue a withholding tax would be “a blunt instrument” that would likely generate only “tiny” amounts. It also pointed up the danger it would discourage artists from performing here.

Ireland, it said, was “not the most attractive location from an earnings point of view” and some events actually lost money because of the cost and time involved in moving people and equipment to Ireland.

“Such acts might need very little disincentive to tip the balance against travelling to Ireland. Our cultural, artistic and sporting landscape would be bleaker as a result,” the department said in a submission to the Revenue on the issue.

It appears the argument proved persuasive.