Jim Aitken, music promoter
Bloomberg have done some digging behind the U2 empire and discovered a tax-free monster.
Generating $389mm in ticket sales, the Vertigo tour was the second highest grossing tour of all time (behind the Rolling Stones' current tour). Additionally the band sold nine million copies of the album, How to Dismantle and Atom Bomb.
In Dcember Bono was awarded an honorary knighthood by the Queen and was nominated for the 2006 Nobel Peace Prize. Bono has always supported many charitable causes. The list includes Amnesty, the Burma Campaign, DATA (Debt, AIDS, Trade and Africa), Greenpeace, RED and ONE.
In June 2006, the band moved their music publishing company from Ireland to the Netherlands, in order to minimse tax. Up until this point, Ireland had allowed artists to generate income tax-free. But a newly introduced ceiling on tax free royalties of $300,000 caused the band to promptly leave Ireland and head for the Netherlands.
The relocation of U2's music publishing will halve taxes on the band's songwriting royalties, which already reportedly total $286 million. Although Bono has declined to comment on the move, the band's lead guitarist, David "the Edge" Evans, said
"Of course we're trying to be tax-efficient. Who doesn't want to be tax-efficient?"
Writing in the Observer, Nick Cohen noted that Evans sounded
"as edgy as a plump accountant in the 19th hole."
Just click your fingers, relocate to Holland, and boom, Poverty is Made History.
Joan Burton, Irish Labour’s finance spokesman, is less than impressed,
“Having listened to Bono on the necessity for the Irish Government to give more money to Ireland Aid, of which I approve, I am surprised that U2 are not prepared to contribute to the Exchequer on a fair basis along with the bulk of Irish taxpayers."
In fact, U2's tax avoidance scheme is equivalent to a nation-wide 1% point reduction in income tax.
Richard Murphy, runs Tax Research LLC, a research institute based in Norfolk, England, and was one of three co-authors of the SOMO report on Dutch tax shelters.
“Ethically in my opinion, Bono’s tax arrangements are entirely inconsistent with his calls upon government to support anti-poverty drives. You cannot be demanding that resources be allocated to anti-poverty drives and then deny those resources to government."
On a recent tour to Australia he demanded that Prime Minister, John Howard increase his country's foreign aid budget from 1% of GDP to 1.7%. He was booed by the audience.
U2 now own stakes in fifteen companies and are in the almost unique position of owning the rights to all their recorded music, a fate even the Beatles failed to achieve. In 1984, the band negotiated this deal with record company Island Records. A year later, following the success of An Unforgettable Fire, the company was unable to pay all the royalties, so in return U2 were granted a 10% stake in Island Records. Four years later, Island was sold to Philipps Electronics and the band netted $30 million.
Though supporting Greenpeace, Bono owns three homes including a house in Nice, an apartment in New York and a mansion in Dublin. More recently, Bono set up a private equity company, Elevation Partners, raising $1.9 billion from investors to invest in media companies.
Murphy has some questions he'd like to pose to U2.
Do you want to:
- stop capital flight from Africa?
- prevent achievement of the Millennium Development Goals?
- undermine democracy?
- deny healthcare, education and opportunity to people around the world?
- encourage lawlessness by promoting the abuse of regulation?
- be seen to be pariahs from a country that is already itself a tax haven?
These are the consequences of ‘tax efficiency’. If you want these things, carry on as you are. If not, pay your taxes now. It’s not U2’s words that count, it’s their actions. Concern is a verb. Walk the talk or what you say is just a load of self promoting rubbish Bono. The choice is yours.
Last word with Bono,
"We don't sit around thinking about world peace all day"
Disclaimer; i am a lifelong fan of U2 and contrary to popular fashion, think their music is great. I just wish they would practice more of what they preach.