U2 Abandons Ireland in the Name of Taxes
August 8, 2006
It is not too often that a business moves out of Ireland for tax reasons, but tax policy can move in mysterious ways as seen by U2 leader Bono’s decision that his band can leave behind Ireland. The Irish native has decided to move his business out of the Republic as a result of its changing tax treatment of royalty income, which is typically large for those in the entertainment business. Seeking a lower tax jurisdiction, Bono has found what he is looking for courtesy of the Netherlands: From Yahoo News:
Irish rock band U2 has transferred part of its multi-million-euro business empire out of Ireland due to changes in tax laws there, a British newspaper has said.
In a report from Dublin, the Daily Telegraph said Tuesday the band had moved part of its publishing company U2 Limited to the same Dutch finance house used by the Rolling Stones because royalties are virtually tax-free in the Netherlands.
There was no immediate comment on the report from U2’s British publicists, RMP Management, nor the Irish finance ministry when contacted by AFP.
According to the Daily Telegraph, the band — whose frontman Bono campaigns against global poverty — made the move in response to Ireland imposing a 250,000-euro (170,000-pound, 321,000-dollar) cap on tax-free incomes.
The ceiling was announced in the Dublin government’s last budget in December 2005, removing the tax exemption on royalties previously in place and from which U2 and other Irish singers and bands benefited in their early years.
U2 were reportedly the world’s biggest music earners last year, with an income of about 217 million euros. U2 Limited deals with the band’s royalty payments and was based in Dublin, the newspaper said. (Full Story)
So the next time you buy U2 merchandise, it won’t be a beautiful day for Ireland as it will be living without the royalty income from its most famous resident. This is yet another example of how individuals with much at stake in taxes are not numb with respect to tax law in one jurisdiction relative to another.