|Feb. 14, 2007 — - U2, the Rolling Stones, movie stars, sports figures and a host of corporations have turned to an unlikely accountant, the Netherlands, to help them avoid paying taxes on multimillion dollar profits in their home countries.|
Bands like the Rolling Stones and U2 were publicly outed last summer for using tax shelters in the Netherlands to protect the millions they earn on royalties from getting taxed in their respective home countries.
They are part of a growing number of celebrities who've turned to the low-tax, politically stable Netherlands to protect royalties they earn legally from licensing intellectual property -- from J.Lo's derriere to U2's hit song "One."
And the Dutch have beckoned by overhauling their tax structure this past year to make it easier and more lucrative for individuals and corporations to set up shell companies that allow income from royalties, interest and dividends to flow in and out of the country tax-free.
"What a group like U2 or the Rolling Stones has done is create a holding company that owns the rights to their songs and their name," Richard LeVine, an international tax expert who counsels corporate and individual clients on asset protection for the Connecticut-based Withers, Bergman LLP, tells ABC News.
"So every time their song is played on the radio, or they sell an album, royalties are paid to their Dutch company, which allows them to collect millions of dollars in royalties tax-free and lowers the profits they're paying taxes on in their home countries," LeVine says.
Kudos to the Dutch in creating as one put it a "respectable" tax haven that brings in added revenue. But the next time Bono starts to whine about the uncaring governments that don't want to spend taxpayer's dollars at the snap of his fingers...
|U2's move came on the heels of a change in Irish tax law, which originated as a way to help struggling artists by not taxing their royalties. It also allowed world-famous Irish artists like Van Morrison, U2, the Cranberries and Sinead O'Connor to earn millions in untaxed royalties. As of Jan. 1, 2007, a cap was set on earnings, and artists who earn more than 250,000 euros (or about $319,000) have to pay taxes on up to half their creative income.|
With the help of the Promogroup, the band created U2 Ltd., which now holds the rights to its song catalogue. U2 Ltd.'s earning are not known. However, the band is said to be worth around $900 million, according to the annual "Rich List" published by London's Sunday Times.
....A spokeswoman for U2 also said that the band would not comment. However, U2's lead guitarist, David Evans reportedly told a Dublin radio station in October, "Of course we're trying to be tax efficient. Who doesn't want to be tax efficient?"
Tell him to go take flying leap.