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VODAFONE’S NEW TAX WINDFALL
Originally posted by 5corpio
THE smallprint of Vodafone’s latest financial report, covering its cosy tax deal with HM Revenue & Customs last year (Eyes passim ad nauseam), reveals that parliament has been misled by a minister and HMRC’s top officials on how its investigation into the company’s offshore tax avoidance scheme was settled.
The government’s response to the Eye’s revelation that Vodafone was let off a few billion pounds when HMRC’s permanent secretary for tax, Dave Hartnett, agreed a deal without consulting his specialists or lawyers, has always been the same. It is that the £1.25bn it settled for was the full amount due under the law – even though as early as 2006 Vodafone had set aside more than £2bn to pay the bill and there was a further four years of tax avoidance to run.
Two months ago Hartnett told MPs: “We didn’t collect a penny less from Vodafone than we thought we could.” HMRC chief executive Dame Leslie Strathie reassured the public accounts committee last November: “I have absolutely no reason to doubt that proper process was followed in this case.”
A decade’s worth of interest?
Since the investigation stretched all the way back to Vodafone’s acquisition of German engineering firm Mannesman, re-engineered in December 2000 through a Luxembourg subsidiary in order to dump billions of pounds of profits tax-free in the principality, the tax bill a decade later – over which time Vodafone has enjoyed the use of taxpayers’ money – ought to have come with a hefty one for interest too. Indeed, asked a fortnight ago by Tory MP Jesse Norman whether the settlement contained any interest, treasury minister David Gauke replied: “I would have to check that – I think the answer is yes,” before adding: “I am not going to be a useful source of information to you.”
The second part was spot on – shame about the first. Vodafone’s results announcement a few days later gave the...........Click HERE to read more
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22nd October 2010 Posting: What happens when you move call centres abroad, and your Business outside the UK....Click HERE to read more
9th November 2010 Posting: Vodafone antics with Japan Sell off....can this be a one wonder for the Tax Bill given by India to them?.......Click HERE to read more
The judgement could relieve pressure on other foreign companies facing similar tax investigations in India. The case centred on Vodafone's $11bn acquisition of the Indian assets of China's Hutchison Telecommunications in 2007. Vodafone said it did not owe tax on the deal, as the assets were held by a firm based in the Cayman Islands. In May 2007, Vodafone's Dutch subsidiary acquired a 67% stake in CGP Investments Ltd, a Cayman Islands registered company which held the Indian telecom assets of Hutchison.....Read more here--: BBC News - Vodafone not liable for up to $4.4bn of India penalties
Telecoms giant Vodafone could escape paying at least part – or even all – of a £1.6billion tax bill in India after it emerged that New Delhi is planning to amend the legislation that led to the demand. The Indian government is understood to be preparing a change to its Finance Bill, which commentators believe could result in a waiver of the entire tax bill, or at least to the cancelling of interest and penalty charges. The development comes ahead of David Cameron’s visit to India next month to discuss investment ties. The Prime Minister believes that Britain and India are on course to double bilateral trade by 2015....Read more here: Vodafone set to escape £1.6bn Indian tax bill