by Gouda » Tue Oct 17, 2006 9:01 am
Keeping that financial <!--EZCODE ITALIC START--><em>Edge</em><!--EZCODE ITALIC END-->...and other puns. <br><br><!--EZCODE BOLD START--><strong>U2 defends move to avoid Irish tax raise</strong><!--EZCODE BOLD END--><br><!--EZCODE AUTOLINK START--><a href="http://www.iht.com/articles/2006/10/16/bloomberg/bxbono.php">www.iht.com/articles/2006...bxbono.php</a><!--EZCODE AUTOLINK END--><br><br>By Fergal O'Brien Bloomberg News<br><br>Published: October 17, 2006<br><br>DUBLIN <!--EZCODE BOLD START--><strong>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 is reducing tax payments that could help finance that aid.</strong><!--EZCODE BOLD END--><br> <br>After Ireland said it would scrap a break that lets musicians and artists avoid paying taxes on royalties, Bono and his fellow U2 band members this year moved their music publishing company to the Netherlands. The group, which <!--EZCODE BOLD START--><strong>Forbes</strong><!--EZCODE BOLD END--> estimates earned $110 million in 2005, will pay about a 5 percent tax on their royalties in the Netherlands, less than half the Irish rate.<br> <br>"Among the wealthiest people, I suppose it's the norm," said Jill Cassidy, who was walking on South King Street near a plaque marking the site of the Dandelion market, where U2 played some of its earliest concerts. "In U2's position, it does come across as quite hypocritical."<br> <br>The tax move has tainted the image in Ireland of Bono and U2. Now promoting a new DVD, book and album, the band is fighting back. David Evans, the guitarist known as <!--EZCODE BOLD START--><strong>The Edge</strong><!--EZCODE BOLD END-->, this month defended the publishing company's move as a sensible decision for a group that makes 90 percent of its money outside Ireland.<br> <br><!--EZCODE BOLD START--><strong>"Our business is a very complex business," </strong><!--EZCODE BOLD END-->Evans said Oct. 2 on the Dublin radio station Newstalk, breaking the band's silence after weeks of public criticism. <!--EZCODE BOLD START--><strong>"Of course we're trying to be tax-efficient. Who doesn't want to be tax-efficient?"</strong><!--EZCODE BOLD END--><br> <br>As residents of Ireland, members of U2 remain liable for personal income taxes, and any Irish-based companies they control will pay taxes on their profits.<br> <br>Principle Management, U2's management company, declined to comment when Bloomberg News asked for a statement from Bono.<br> <br>Bono, who was born in Dublin, has been mentioned as a candidate for the Nobel Peace Prize since 2003. The Norwegian Nobel Committee on Friday awarded the 2006 prize to Muhammad Yunus and his Grameen Bank in Bangladesh for advancing social and economic development by giving loans to the poor.<br> <br>Bono, 46, has toured Africa, established the pressure group Debt AIDS Trade Africa and become one of the most vocal supporters of the Make Poverty History campaign. In July 2005, he helped persuade world leaders to double aid for Africa to $50 billion a year by 2010 and erase the debt of the 18 poorest countries on the continent.<br> <br>"I can see no connection between what he is doing and Make Poverty History," said Richard Murphy, a director at the Tax Research organization in Britain and an author of the book "Money Matters: Artist's Financial Guide."<br> <br>"He is setting a poor example by his tax affairs," Murphy said.<br> <br>At a concert last year in Croke Park, the biggest stadium in Dublin, Bono appealed to Prime Minister Bertie Ahern to raise foreign aid to 0.7 percent of the gross domestic product by 2007 from 0.5 percent now. The crowd responded by booing Ahern.<br> <br>The political catcalls have now turned on Bono.<br> <br>"It seems odd, in a situation where they enjoy an already favorable tax regime, they would move operations to the Netherlands to get an even more favorable rate," said Joan Burton, finance spokeswoman for the opposition Labour Party.<br> <br>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 who make more than €500,000, or $625,000, a year will pay tax on half their "creative" income, according to the Irish Revenue Authority.<br> <br>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.<br> <br>Some fans accept the band's explanation of its tax planning because U2 has been generous in the past.<br> <br>"They've paid plenty of money up to now," said Peter Cooper, who lives in Bray, near Bono's home in Dalkey. "I think they are quite right" to move the company abroad. <p></p><i></i>
