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MARCH 2017

Live Nation taxes Manfred Tari mt@vip-booking.com A worthwhile lesson on how to pay less

one submitted to the SEC with 106 pages,

work well enough. Many SME’s will mostly

than one percent income tax.

apparently containing much more detailed

work nationally and will not have permanent

information.

establishments or subsidiaries abroad, but undertake foreign work from their national

The facts upfront: In 2016 in the US Live Nation paid on a federal level $ 500.000,

But in a time where investigative media

base. Then only domestic taxation applies

on a state level $5.4 million (Delaware) and

reports reveals scandals such as the Panama

and the result is reasonable. But income/

abroad $29.2 million on income tax, when

Papers or Lux Leaks the question of tax

corporate taxation is not a matter of the EU,

reaching for the first time a revenue result

avoidance reaches

new levels of public

but has remained with EU Member States,

of $8.35 billion as filed in the annual report

awareness. In fact Live Nation did not

while outside the EU every state has its own

for the SEC (US Security and Exchange

hide any of those figures in its report for

tax rules anyhow, which means that very

Commission)

the SEC, but paying income tax of just not

often tax rules do not fit and double or

more than $500.000 in the US on federal

excessive taxation can easily happen, which

Additionally the company declares in its

level and on a state level $5.4 million in the

that is not fair.

regular report: “The amount of earnings at

tax heaven of Delaware when gaining at

December 31, 2016 that has been earned

the same time a turnover of $8.35 billion

To take away these obstacles, international

over time, and permanently reinvested,

raises the question regarding the imbalance

companies often set up structures to bring

was approximately $1.4 billion. It is not

of taxation for corporates and the one for

down the double/excessive taxation. This is

practical to determine the amount of

smaller and medium sized companies.

often considered as tax avoidance, but is in

federal and state income taxes, if any, that

practice bringing down the tax burden to a

might become due in the event that any

more reasonable level.

remaining available cash associated with VIP-News: Over the years you have

these earnings were distributed.”

taken part in several high level meetings Since the spin off by Live Nation from

or hearings with officials concerning

Clear Channel Communication the editor

taxation issues. How meaningful is

of the VIP-News section “Business News -

the political impact on the potential

Music In Shares” reports continuously on

outcome

losses and debts as filed by Live Nation in

resulting from such consultations?

the

decision

finding

its regular reports. However, the magic

This question becomes even more relevant

of accounting and figures in business

due to the reported overall earnings of $1.4

DM: The meetings about taxation at EU level

reports by corporate companies can be

billion by Live Nation, wherever they might

have been disappointing, unfortunately,

mind-boggling. Especially the 2016 annual

be located. Deeply impressed regarding the

which has to do with the very limited

report caused some extra research efforts

advantages on the taxation of the likes such

power that the EU has regarding income/

to identify where the company allocated

as Live Nation, VIP-News spoke with Dr.

corporate taxation. My membership of the

the loss of $0.23 per share when actually

Dick Molenaar from All Arts Tax Advisers in

Expert Group for taxation of cross-border

reporting a net profit of $2.9 million and

the Netherlands.

individuals has been very positive in the final report, but already in advance I expected

revenue of $8.35 billion. VIP-News:

tax

that not much would be done with this

In 2016 the loss was located in the section

systems in the world of enterprises and

report. The EU tax court cases, in which Dr.

“Accretion of redeemable non controlling

businesses? Do you believe that SMEs

Harald Grams has forced decisions (Gerritse

interests”

and corporate companies are dealt

and Scorpio), have been more successful.

with in an even manner?

This is different in regard to meetings about

and

declared

with

$49.95

million, resulting out businesses of which

How

fair

are

our

VAT and social security in the EU, because

Live Nation holds less than 50 per cent.

10

or

These figures can be found in the regular

DM: Not so fair, because taxation of cross-

these are matters of the Union and therefore

business report with 13 pages or in the

border services and ownership does not

officials are willing to act on them.