Stones paid just 1.6% tax on £240m royalties
Wednesday 02 August 2006
The Rolling Stones have paid just a fraction of their vast earnings in the last two decades to the taxman.
Records released in the Netherlands show that the band's tax bill on their earnings of $450m (£240m) was a mere $7.2m. The information came to light after the Stones decided to open two foundations in Holland to manage the rights to their music, performances, merchandise and films and to settle the question of ownership should one of them die. The registration for the two new foundations, which will control the rights to the Stones' royalties, revealed that the Stones had been putting all their royalties into the Netherlands since 1972.
The figures were from 20 years of annual reports for Promogroup, the fiscal mother company of the Stones in the Netherlands, where the tax rate is so low because there is no direct tax on royalties, unlike in other countries.
And the tax breaks are so good for the rockers that U2 have also now copied the Stones by moving to the same exclusive Amsterdam address on 1 June. The bands now share the same Dutch director, Jan Favie.
Details have leaked out because the Stones are preparing for their final curtain call - making their wills - and Dutch law requires certain information to be made public.
Germany's Die Welt newspaper reported on the extraordinary tax break that the band enjoyed through the use of offshore trusts and companies. It said the trio went Dutch in 1972 to have their millions managed from Amsterdam because they didn't trust British finance houses.
Now they are making wills to ensure that beneficiaries don't end up squabbling when they are playing that great comeback tour in the sky. Details of the tax break were revealed in the country's trade registry, according to Die Welt.
A Dutch holding company called Promogroup is the umbrella financial organisation that has been secretly managing the finances of the three original Stones for the past 35 years.
The bassist Ronnie Wood doesn't qualify to have his assets managed by the Dutch group - with just £70m in the bank, he is the poor relation to the others in the band.
The registry also pinpoints a "blueblood" as their finance manager: one German-Austrian Prince Rupprecht Ludwig Ferdinand zu Loewenstein-Wertheim-Freudenberg, who the band reportedly nicknamed "Ruppie the Groupie".
Sabine Schuttgens, a lawyer who was involved in setting up the Stones' trusts in the Netherlands, said: "The foundations are to make sure that after the death of the rock stars there would be no arguments among their heirs."
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