Tax, Royalties and Rock'n'Roll: Why U2 Face Protests
Staff Writer, CNBC.com
Fans of rock groups can get a little testy when their heroes display a less than straightforward attitude to their tax affairs. The latest victim of this is U2, one of the world’s biggest stadium rock bands, which will face protests during its high-profile set at Glastonbury this year.
Supporters of tax campaigners Art Uncut are planning to demonstrate as part of a designated Bono Pay Up weekend starting June 24, an Art Uncut representative told CNBC.com.
The band, whose members were all raised in Dublin, moved U2 Ltd, the company into which its royalties are paid, to the Netherlands for tax reasons in 2006 after the tax regime changed in Ireland.
Artists paid no income tax in Ireland between 1969-2006 under laws brought in under the administration of Charles Haughey, the Prime Minister who was later accused of embezzlement.
They now are granted tax relief only on the first 250,000 euro ($365,000)earned each year.
After a high-profile tour, U2 are the world’s highest earning musicians, banking $130 million in the year to June 2010, according to Forbes.
“What we're dealing with here isn't competition between companies; it's competition between countries, fighting to undercut one another's tax rates. This kind of competition leads to nothing but bad consequences for the citizens of the world,” Art Uncut said on its website.
Lead singer Bono has come under attack because the group believes his public support of causes such as Third World development does not sit well with his tax affairs.
A spokesman for U2 did not return calls. The band’s manager Paul McGuinness said in 2009: "U2 is a global business and it pays taxes globally."
"At least 95 percent 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.”
U2 are far from the first rock band to move away from their roots for the distinctly un-rock and roll reason of tax avoidance.
Singer Adele said recently of the UK tax regime: “I'm mortified to have to pay 50 percent! [While] I use the NHS, I can't use public transport any more. Trains are always late, most state schools are shit, and I've gotta give you, like, four million quid – are you having a laugh? When I got my tax bill in from [the album] 19, I was ready to go and buy a gun and randomly open fire."
The Rolling Stones famously fled UK taxes of 83 percent for France during the 1970s. Exile On Main St, rated as the 7th best album of all time by Rolling Stone, was recorded during this period away from the UK.
Keith Richards, the band’s lead guitarist, wrote in his autobiography, published last year: “The last thing I think the powers that be expected when they hit us with super-super tax is that we’d say, fine, we’ll leave. We’ll be another one not paying tax to you.”
His bandmate Ronnie Wood was one of several high-profile celebrities who bought homes in Ireland during its lower tax regime.