Tuesday, October 17, 2006
Interesting story in Bloomberg: Bono, Preacher on Poverty, Tarnishes Halo With Irish Tax Move, by Fergal O'Brien:
Bono, the rock star and campaigner against Third World debt, is asking the Irish government to contribute more to Africa. At the same time, he's reducing tax payments that could help fund that aid.
After Ireland said it would scrap a break that lets musicians and artists avoid paying taxes on royalties, Bono and his U2 bandmates earlier this year moved their music publishing company to the Netherlands. The Dublin group, which Forbes estimates earned $110 million in 2005, will pay about 5 percent tax on their royalties, less than half the Irish rate....
For years, Bono and U2 got a better deal than most Irish taxpayers because songwriters paid no tax on earnings from music publishing. That will change next year, when Ireland limits the tax exemption, which also applies to writers and artists. From Jan. 1, artists that make more than 500,000 euros ($625,450) will pay tax on half their ``creative'' income, according to Ireland's Revenue Authority. Remaining in Ireland would have forced Bono to pay a 42 percent tax on such earnings. Alternatively, the band could have channeled profits through a company to pay the 12.5 percent corporation tax....
Some fans accept the band's explanation of its tax planning because U2 has been generous in the past.