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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. 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:
Given the international climate against tax avoidance and evasion, Bono has likely given up on an aspiration to be awarded a Nobel Peace Prize. Related tax links Ireland's small gain from Apple's possible EU tax probe payment European Commission: Apple given special tax deals by Ireland Apple's foreign tax rate tumbled after 2007 Irish 'advanced opinion' G20 finance ministers reaffirm commitment to tax reform; Ibec takes Finfacts' advice OECD & Tax: Everything grand in Ireland's Republic of Spin? OECD proposes biggest reform of global business tax rules since 1920s Finfacts submission to Department of Finance consultation on corporation tax reform OECD BEPS Project submission from Finfacts: Ireland should embrace corporate tax reform Irish corporate tax policy like property bubble driven by short-term interests IMF explains “Double Irish Dutch Sandwich” tax avoidance US company profits per Irish employee at $970,000; Tax paid in Ireland at $25,000 Estonia heads OECD tax competitiveness index; Ireland at 15, US at 32 © Copyright 2011 by Finfacts.com
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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.”