U2 have gone to ‘War’ with the Irish government over their tax affairs after critical comments from Minister Joan Burton.
The Labor Party Minister for Social Protection was critical of the band’s decision to move part of their rock empire to Holland for tax reasons.
The Sunday Independent reports that the band has made official representations to the government in protest at the remarks.
The paper says a band representative made contact with a senior government adviser to ‘seek greater clarity’ on what Minister Burton had said.
A government source confirmed the band’s unhappiness with Burton’s speech, saying: “The boys aren’t feeling the love.”
Burton is the first government minister to directly criticise U2’s move to Holland to avail of lower taxes, following the introduction of the cap on the artists’ tax exemption.
The Sunday Independent first revealed the band’s controversial move to Holland in August 2006 and outlined their collaboration with Amsterdam-based tax adviser Jan Favie who has also worked with the Rolling Stones.
By moving their publishing to Holland, U2 are able to legitimately avoid paying tax on their royalties.
Burton had criticised companies that were not paying their fair share of taxes to help pay for essential public services and she made a direct reference to U2 during that speech.
She said: “I often meet people from different parts of Europe, who can be quite critical of elements of the Irish tax regime. But I always say to them, well, you know, we have a very attractive regime over a long period of time for people who are artists.
“And in fact, the well-known example, U2, moved quite an element of its activities through the Netherlands because clearly whatever the Netherlands was doing was far more attractive in tax terms for their companies and for their organisations than the quite generous arrangements that Ireland has traditionally had in the area.
“That’s not acceptable if a huge amount of personal wealth and corporate earnings and corporate profits are diverted in a way in which they make little effective contribution.”
U2 have sold more than 150 million records around the world and has an accumulated net worth of over a billion dollars.
A source close to the band has confirmed that the band made contact with the Government to ‘clarify’ what Minister Burton had said about them.
The source said: “There was an informal conversation in the days after her speech. The purpose of the call was twofold. Firstly, it was to seek greater clarity on what Joan said. But it was also to communicate the band’s own position. U2 operate all over the world and pay taxes all over the world.”