U2 reject attack by 'tax justice' campaign

Band insist they 'invest in Ireland' amid claims of hypocrisy

Thursday February 26 2009

U2 have hit back at critics who have accused the band of setting up intricate foreign tax avoidance schemes to avoid paying high taxes in Ireland.

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.

Hypocrisy

He was speaking after a group of Third-World campaigners accused the band of hypocrisy over their tax affairs, claiming "tax avoidance" schemes in general impacted on the world's most impoverished countries.

The Debt and Development Coalition (DDCI), whose members include Concern, Trocaire, Oxfam and a string of Catholic missionary orders, yesterday attacked the band's use of a tax base in the Netherlands.

The DDCI confronted Finance Minister Brian Lenihan outside his offices yesterday and told him U2 was depriving the State of revenue needed for social services and aid to foreign countries.

But 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 told the Irish Independent.

"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."

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.

Nessa Ni Chasaide, of the DDCI, told Mr Lenihan millions of euro were being lost through similar tax-avoidance schemes which she claimed kept cash, in the form of foreign aid, from the poorest people in society.

As a Bono impersonator sang U2 numbers in the background, Ms Ni Chasaide told Mr Lenihan that tax-avoidance schemes such as the one used by U2 had a detrimental effect on impoverished countries.

"There is nothing illegal about what they have done in taking advantage of more favourable tax laws but, given Bono has invested so much in promoting an end to poverty, we see a contradiction there."

She told Mr Lenihan: "Impoverished countries lose millions every year because of tax avoidance and it's essential that our aid programme is not undermined by a lack of action by rich countries, including Ireland."

Mr Lenihan said the Government had abolished the "Cinderella rule" where people could say they had not spent a day in Ireland if they left by midnight. "There is a problem with smaller countries that have set up deliberate tax havens and we are debating that at EU level."

- Ciaran Byrne

Protest at U2's tax exile status

U2 performing at the Brit awards earlier this month. A protest was held in Dublin today over the band's decision to move their tax affairs to the Netherlands

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RONAN McGREEVY

Protesters have demonstrated outside the Department of Finance against U2’s decision to move their tax affairs to the Netherlands to avoid paying tax on their royalties in Ireland.

The protest was organised by the Debt and Development Coalition Ireland (DDCI) which campaigns on issues related to the developing world. The coalition contains such organisations as, Trócaire, Oxfam and various Catholic missionary orders.

U2 moved their publishing arm to the Netherlands in 2006 after the Government capped tax-free earnings for artists at €250,000. Previously, U2 had been one of the biggest beneficiaries of Ireland's tax-free status for artist royalties.

The coalition met Minister for Finance Brian Lenihan who pointed out that the Government had abolished the Cinderella rule where people could say they had not spent a day in Ireland if they left by midnight.

“We have tax treaties with other countries that regulate where you pay tax. There is a problem with smaller countries that have to set up deliberate tax havens. We are raising that at EU level,” the Minister said though he did not address the specific issue of U2’s tax affairs. The band are resident in Ireland for tax purposes.

Accounts for 2007 for U2 Ltd show the band paid out more than €21 million in wages in 2007 in a relatively quiet year where they were not touring or releasing new material.

Bono impersonator Paul O’Toole reworked the lyrics of I Still Haven’t Found What I’m Looking For to mock the band’s decision. “I know avoiding tax ain’t fair/it’s just because I’m a millionaire, I don’t need to pay like you, no, I won’t pay like you/because I still haven’t learned about democracy.”

Mr O’Toole said: “Their music does not bother me. It is their policy of avoiding tax that bothers me. Bono talks about dead kids, but he won’t pay a penny towards it.”

Mr O’Toole posed with a mock-up of a donation to the world's poor in one hand and a large sack of unpaid tax in the other.

The DDCI is following it up with the launch of an “international song contest” inviting re-worded versions of U2 classics to highlight the band’s stance on tax.

It is timed to coincide with the release of U2's new album No Line on the Horizon which goes on sale at midnight on Friday.

DDCI co-ordinator Nessa ní Chasaíde said the decision to holding the protest outside the department of Finance was to highlight the fact that U2’s tax avoidance measures deprives the Irish exchequer of taxation revenue that could be spent on development aid.

“Bono has championed the call for increases in aid to impoverished countries, yet in his personal life he is engaged in tax avoidance issues and it is tax avoidance that is undermining the possibility of developing countries fighting their way out of poverty,” she said.

“The practice of being able to move your finances around easily and without high levels of transparency is extremely problematic for developing countries. The kind of practice that U2 is engaging in is part of that problem.”

Nobody from U2 was available for comment, but the band will defend their tax measures in an extensive interview to be published in this newspaper on Friday.

The times they are a changin'

A placard left outside Anglo Irish Bank in Dublin, following a 100,000 strong protest against how the Irish government has managed the economy. The times they are a changin'.

"Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'."

Bob Dylan 1963

Three questions, Mr Lenihan…

Three questions, Mr Lenihan…

You have just used €1.5bn of our money to nationalise Anglo Irish Bank, a specialist bank with a relatively small number of wealthy clients which is worth pittance.

As a public servant, it would be…patriotic…if you answered three questions:

1. Does the bank have an operation in Jersey and if so, how much are its assets worth?
2. Did Sean Fitzpatrick and Lar Bradshaw know the bank would be nationalised before public statements were made and if so, did they buy shares in the bank just before this was announced?
3. Did Fianna Fail or any senior members of government personally benefit from this nationalisation. If so, who benefited and how much did they gain?

Midnight fairytale over as Cinderella clause abolished

Cinderella Clause abolished

"At the moment, tax exiles who are here for less than 183 days a year do not have to pay their full tax in this country. But a day is not counted if the individual leaves by midnight, hence the tax regulation earned the nickname the "Cinderella rule".

From now on, though, once a person who is a tax exile is in the country at any part of the day, the day counts for tax purposes.

The rule on the 183 days in a calendar year, or 280 days over a two-year period, was set down in 1995."

Tax break gives Cecelia more cash to play with

Tax break gives Cecelia more cash to play with

"Best-selling author Cecelia Ahern, who has already been granted tax-free status for earnings from her novels, has now been given the perk by the Revenue Commissioners for her first play."

The purpose of the tax exemption for artists was a good one. To encourage artists to stay in Ireland so we could have an innovative arts scene.

How does granting yet more tax exemptions to a millionaire encourage innovation?

And how does it help the struggling citizens of Ireland, whose tax pays for the services she uses in when living in Ireland?