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Bono defends Irish tax regime to defend his Dutch one
By Michael Hennigan, Finfacts founder and editor
Oct 12, 2014 - 3:56 PM
In an interview published today in the Observer, the British newspaper, Bono, the font man of the Irish U2 rock group, has defended the Irish corporate tax regime as U2's own use of a Dutch letter-box company to avoid tax, has dented Bono's bona fides as a celebrity anti-poverty campaigner.
Bono avoids discussing issues like specific tax dodges such as his own and the Double Irish while in common with Enda Kenny, taoiseach, he answers a question that hasn't been asked by arguing that Ireland has needed a low corporation tax rate - - there is no pressure to change the headline 12.5% rate.
Bono says Ireland has no natural advantages. However, Denmark, another small economy, has become a world leader in wind energy with 30,000 working in the sector - - more than the US pharma companies responsible for 50% of Ireland's goods exports - - while Ireland is fretting about Apple, Google and the like, who employ most of their mainly Irish-based admin staff from Europe.
At the Clinton Global initiative in 2013, Bono criticised external resource companies in Africa who use the same Dutch letter-box facilities as himself.
Finfacts: Bono's hypocrisy on Africa, corporate tax avoidance in Ireland
There is a big difference in arguing for Ireland's low 12.5% rate and facilitating Apple to reduce its foreign tax rate in 2012 on 61% of its global revenues or $37bn to 1.9%
In the interview, Dorian Lynskey of The Observer writes:
Of course, the biggest blow to Bono’s activist reputation has been U2’s collective decision in 2006 to transfer U2 Ltd, which handles their publishing royalties (not the bulk of their income but a significant chunk), from Ireland to the Netherlands to reduce their tax bill. Their Glastonbury set attracted a small lobby of banner-waving protesters. Edge is painstakingly even-handed about it. “Was it totally fair? Probably not. The perception is a gross distortion. We do pay a lot of tax. But if I was them I probably would have done the same, so it goes with the territory.”
Like the protesters, I think the arrangement sits badly with Bono’s development work and we go back and forth for a while. It isn’t a clandestine offshore tax haven, Bono insists. “All of our stuff is out in the open. How did people find out about it? Because it’s published. The sneakiness is when you don’t even know what’s going on.” Eventually, we agree to disagree, and the conversation moves on to Ireland’s corporation-friendly tax laws, currently the subject of an EU investigation.
“Look, Ireland is not going to back down on this,” he says. “We are a tiny little country, we don’t have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’ve known. That’s how we got these [tech] companies here. Little countries, we don’t have natural resources, we have to be able to attract people. We’ve been through the 50s and the 60s, and mass haemorrhaging of our population all over the world. There are more hospitals and firemen and teachers because of [Ireland’s tax] policy.”]
Given the international climate against tax avoidance and evasion, Bono has likely given up on an aspiration to be awarded a Nobel Peace Prize.
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European Commission: Apple given special tax deals by Ireland
Apple's foreign tax rate tumbled after 2007 Irish 'advanced opinion'
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Finfacts submission to Department of Finance consultation on corporation tax reform
OECD BEPS Project submission from Finfacts: Ireland should embrace corporate tax reform
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