Dr. Dre, always the savvy business man, has now located three of his companies in Ireland in order to take advantage of their corporate tax rate.
The music mogul and famed producer has seen a lot of success from his headphones line Beats By Dre. The empire from which the headphones stem, Beats Electronic, has now established three different companies in Clonakilty, Co Cork to utilize the corporate tax rate offered there. This will help reduce his tax liability, as the Irish Examiner reports.
The three business have a shared address with O’Mahony Donnelly accountants, who commented on helping out businessmen like Dr. Dre, "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." Although he declined to comment specifically on Dr. Dre's endeavors, he did add, "The low corporate tax rate is a big factor in attracting companies to set up in Ireland, but there are many other reasons."
It breaks down in this way: Dr. Dre's three companies based overseas include Beats Electronics Services Ltd and Beats Electronics International Ltd. Those three are owned by Irish-based Beats Electronics Holding Ltd, with the ultimate parent company, Beats Electronics, based in California. By structuring his companies like this, Dre "allows for money to be channeled between the separate companies in the form of royalty payments or licence fees" which artificially but legitimately reduces profits, thus reducing tax liability.
Dr. Dre is definitely taking very care of his finances and the business that gives him the most cash. He was recently named Forbes' highest paid musician of 2012, raking in $110 million this year, mainly due to Beats By Dre.