It’s long been a refuge for hippies, celebrities, and retiring Germans, but West Cork has now emerged as a tax haven for the world’s highest-paid musician.
Gangsta rap pioneer Dr Dre, who helped launch the careers of Eminem and 50 Cent, has based three of his companies in one of the region’s best-known towns to avail of Ireland’s generous corporate tax rate, thereby reducing his tax liability.
Presently searching for Beats by Dr Dre head phones one of my Xmas gifts to myself— King Jaii (@janelledesir) December 2, 2012
Dr Dre — known for multmillion selling hits like ‘Nuthin’ But a G Thang’, ‘I Need a Doctor’, ‘Still D.R.E.’, and ‘California Love’ — last week topped the annual 25 highest-paid musicians of 2012 list compiled by Forbes, by earning €86m in 2011-12.
The biggest chunk of his earnings came not from his music, but from a 51% stake in his Beats by Dre headphones business.
So Dr.Dre`s Beats headphones HQ is in clon , gig at boiler perhaps ? #beatsbiy— Douglas Mac Sweeney (@MacSwiggans) December 2, 2012
Dr Dre’s business empire, Beats Electronics, this year established three separate companies in Clonakilty, Co Cork, to avail of Ireland’s corporate tax rate.
The three businesses each share their address with O’Mahony Donnelly accountants, run by husband and wife Michael O’Mahony and Ann Donnelly.
Mr O’Mahony said helping clients like Dr Dre had become one of their niche markets. “Since I established O’Mahony Donnelly here in 2000 we’ve worked with a number of multinational corporations to get them set up in Ireland. This has become a great niche for our firm.
“We are active in a network of international business advisers that brings us clients looking to do business here.
“We like the challenges and diversity this niche brings to our firm.”
He declined to comment on the specifics of the firm’s relationship with Dr Dre’s Beats empire. But he said: “We set up limited companies, provide company secretarial services including providing a registered company address, as well as other accountancy and business advisory services.
“The low corporate tax rate is a big factor in attracting companies to set up in Ireland, but there are many other reasons.
“Ireland is the only country in the eurozone with English as a primary language and we are still known to have a great workforce, top quality of life and business environment.”
He said international clients like this added commercial and economic activity to Ireland, including job creation.
“It would be a very positive step if our Government can continue to support a positive business environment in the budget.”
Dr Dre’s Irish subsidiaries, including Beats Electronics Services Ltd and Beats Electronics International Ltd, are owned by Irish-based Beats Electronics Holding Ltd, with the ultimate parent company based in California.
The corporate structure allows for money to be channelled between the separate companies in the form of royalty payments or licence fees to artificially but legitimately reduce profits as a means of reducing tax liabilities.
David Enright, who is an accountant for one of U2’s companies, is also a director of two of the Irish Beats subsidiaries.
In 2006, U2 moved its publishing company to Amsterdam after the Government capped the artists’ tax exemption.
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