U2 Can Benefit From Dutch Tax Breaks

Within a couple of weeks of some U.K. papers reporting The Rolling Stones‘ benefit from huge tax breaks by using offshore trusts and companies, U2 appears to have decided to move part of its multimillion-pound operation to Amsterdam.

According to The Guardian, the band has faced some criticism for avoiding some national taxes.

“Having listened to Bono on the necessity for the Irish government to give more money to Ireland Aid, I am surprised that U2 are not prepared to contribute to the exchequer on a fair basis along with the bulk of Irish taxpayers,” said Joan Burton, the country’s Labour party finance spokeswoman.

The news coincides with the revelation that Elevation Partners, the California-based venture capital firm in which Bono has a major share, has invested about £157 million (US$300 million) in Forbes, the U.S. business magazine frequently described as the “bible of capitalism.”

It pitched U2’s 2005 earnings at about euro 210 million.

Elevation is a private venture capital firm made up of Bono and six other partners. It has an estimated capital value of US$1.9 billion.

The Guardian report suggests U2’s move may have been triggered by reforms announced last December by Irish finance minister Brian Cowen, who imposed a cap of euro 250,000 on tax-free incomes for artists resident in the republic.

Before the cap, the scheme attracted many famous names to Ireland. But Cowen and the government came under pressure to curtail the incomes of those benefiting “disproportionately” from the scheme and managing to “reduce their taxable income to nil.”

U2’s main business interests are currently centered in Dublin, where it’s planning to construct a “U2 Tower.” Situated on the south side of the River Liffey, it would be the tallest residential development in Ireland.

The 31-floor construction, which has plans for luxury apartments and space for the band’s new recording studios, has already drawn complaints from locals in Dublin’s Ringsend.

“This tower is going to appear as a monstrosity in what used to be a small maritime village,” Damien Cassidy of the Ringsend Environmental Group told BBC News.

– John Gammon