Song Royalties are Being Sheltered Off-Shore to Avoid Taxes
This Paradise Papers leak just keeps on giving as study of the documents continues to turn up how the rich and famous shelter their money in places normally inaccessible to us normal plebes. Some of the billions squirreled away have been generated by song royalties. The CBC reports:
The songs that you danced to in your youth or at your son’s or daughter’s wedding? The summertime hit you sang driving down backroads or the reggae tune blasting at the beach? What are they doing offshore?
They’re there for the same reason as other assets — tax advantages. Skipping taxes helps increase earnings from intellectual property — patents, copyrights, trademarks and trade secrets — as well as other holdings.
Files from the Appleby law firm office on the island of Jersey, in the English Channel, include a cache of music publishing rights, a stream of royalties to be collected for music produced by artists that included John Denver of Country Roads fame, Duke Ellington, Chubby Checker and Sheryl Crow.
It’s a music catalogue, held until 2014 by a Jersey-registered company and originally managed by another company registered in Ireland. Why Jersey? Its standard corporate tax rate is zero.
Hmm. You might want to keep reading.
But to be clear…nothing illegal here. Governments may not like it but it is really just a smart use of the tax system. Like making an RRSP contribution