U2 have reacted to yesterday's criticisms of their tax affairs, reported here many times in the last day. The Belfast Telegraph has reported that:
On the eve of their new album launch, the band's manager, Paul McGuinness, last night rejected accusations of hypocrisy and said Bono, Larry Mullen, Adam Clayton and the Edge were all "personal investors and employers" in Ireland.
Addressing the issue of their tax affairs for the first time, Mr McGuinness said much of U2 paid different taxes in different countries. ...
Mr McGuinness last night insisted the band is "fully compliant" with Irish tax legislation. "U2 is a global business and it pays taxes globally," he said.
"At least 95pc of U2's business -- including record and ticket sales -- takes place outside of Ireland and as a result the band pays many different kinds of taxes all over the world.
"They continue to remain Ireland-based and are personal investors and employers in the country.
"Like any other business, U2 operates in a tax-efficient manner."
And then the paper added:
U2 moved their publishing arm to Holland in 2006 after the Government capped tax-free earnings for artists at €250,000. The band was one of the biggest beneficiaries of the royalties scheme.
And that's what this is all about. Let's stop all the spin. The reality was that Ireland gave them a massive tax break. Their royalty income was not taxed there for many years. And when Ireland proposed taxing that income in 2006 - at a maximum corporate tax rate of 12.5% - they fled to the Netherlands instead where the tax rate might be no more than 5%.
That was tax avoidant behaviour. That's the beginning and the end of it. All the excuses are, to be polite, bullshit. It's not a phrase I use often. That's why it's the right one now.
No one is saying it's illegal. But then asking people to make payment to developing countries is not about legal argument. It's about using tax revenues for ethical purposes. And Bono is a straightforward hytpoicrite for making ethical arguments in favour of development funding out of tax revenues when he's refusing to pay his fair taxes, as defined on an ethical basis.
He's also refusing to recognise the role of taxes in development as well. And that's another issue I have with him. He has his head firmly in the sand. The trouble is that doesn't stop him either speaking or singing.
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Richard
Maybe I am being thick but what’s the issue here ? U2 are saying that they are tax compliant and your heading accuses them of tax avoidance, which you yourself say in the article is not illegal. Whilst their structure was in Ireland they were complying with Irish tax law and paying tax at the due rate. They then transferred their structure to Holland and paid a lower rate there, whilst seemingly still being fully compliant with Irish tax laws.
So what exactly is the story ? Seems to me that the story is “U2 accused of lawful tax avoidance – read all about it!”. Are they being accused of breaking laws which don’t exist ?
Yes Rupert you are being thick. As a free marketeer I support U2s right to arrange their tax affairs within the law so as to minimise their tax liability.
What sticks in my craw is the concept of Bono then lecturing us all on the morality of helping ‘Make poverty history’ (the general thrust of which campaign is more taxpayers (ie my) money to be sent to foreign countries, or money taxpayers have already loaned being written off) when he personally is doing his utmost to reduce the tax revenue to the Irish (and many other) governments.
That is blatant hypocrisy.
It seems to me that Bono’s plea to Governments around the world to be more generous with aid and the way he manages his tax affairs are two unconnected matters. As any sensible person would, he minimises his tax bill. His paying more tax in Ireland would be unlikely to increase Ireland’s aid to undeveloped countries and even if it would it’s also unlikely that the money would be spent the way that Bono would choose to spend it. If he increases his take home pay by minimising his tax, he has the choice of donating any tax saved in a way that he thinks would be the most effective.
I’m not saying that is what he does, although it might well be, but to call him a hypocrite without knowing the details of how he chooses to spend his take home pay is not logical.
If one were to take you argument to its logical conclussion you would be expecting him to arrange his tax affairs so that he maximises the tax he pays. I’m sure there must be some countries in the world that would happily snaffle 90% of his gross income. It wasn’t so long ago that the British Government were taxing the super rich at 96% if my memory serves me aright.
I think we should boycott U2 until they pay a fair amount of tax like everyone else.
I think we sould boycott U2 because they’re rubbish!