The Story

The Rolling Stones relocated to France in 1971 partly to escape UK personal tax (then was 83%+ marginal rates in the top bracket) (“Exile on Main St.” was recorded during this period).

Their music publishing rights were subsequently held via a Netherlands-based structure: Promotour and later Musidor entities based in the Netherlands.

The Netherlands has been a common IP holding jurisdiction because:

• Extensive tax treaty network (95+ treaties)

• Historically favourable treatment of certain royalty flows

• EU location with treaty benefits

• Strong IP legal framework

Why It Worked

For a band earning significant global royalties (touring, publishing, mechanical rights, licensing), the Netherlands structure enabled:

• Royalty flows routing through Netherlands with reduced withholding

• Treaty-based reduced withholding rates at source

• Netherlands corporate tax treatment on the aggregated royalty income

• Distribution to beneficial owners via various treaty-optimised paths

The tax savings over decades were substantial, in the multi-millions (though exact figures are private).

What’s Changed

BEPS reforms have tightened royalty routing. Anti-abuse rules (Principal Purpose Test) can deny treaty benefits where the structure lacks substance, meaning the documentation of substance is now very important for these sorts of structures. Netherlands’s role as pure conduit has narrowed.

But the underlying idea - IP holding in a jurisdiction with strong treaty network and reasonable corporate tax - remains valid.

Modern Applications for Musicians and Creators

For today’s musicians, authors, and creators earning substantial royalty income:

Strong IP-rights/IP holding jurisdiction options:

• Ireland (12.5%): genuine substance possible, EU access, IP-favourable framework

• Malta (5-35% depending on structure): EU access, IP box regimes

• Cyprus (12.5% base + IP box): EU access, non-dom benefits for owners

• Netherlands (25.8%): still valid with substance

• UAE Free Zone (0% qualifying): for creators willing to relocate personally

• Singapore: substantial substance possible for Asian creators

• Personal residency alignment: where the creator lives matters more than IP company location. Post-BEPS, IP income attributed to a personal-residence CFC often gets pulled back to personal tax.

The Small-Scale Reality

For a musician earning $50K/year in royalties, structural IP planning rarely pays for itself. Threshold typically $150K+ annual royalty income to justify meaningful structural costs.

For creators at scale ($500k+ royalty income), IP holding structures can genuinely reduce tax drag typically by 15-50% depending on jurisdictions and personal residency.