BusinessCompany NewsVodafone FD throws down CFC gauntlet

Vodafone FD throws down CFC gauntlet

Vodafone's finance chief calls for policymakers to make up their mind, as the mobile phone giant remains locked in a dispute with the taxman on the purchase of German phone giant Mannesmann through a Luxembourg subsidiary

Vodafone’s
finance chief Andy Halford has called on policy makers to clarify their stance
on the taxation of controlled foreign companies as a £1.7bn case continues to
hang over the mobile giant’s head.

The mobile phone company remains locked in a dispute with the taxman on the
purchase of German phone giant Mannesmann through a Luxembourg subsidiary, and
Halford has called for policymakers to speed up the process of reaching a
conclusion.

Vodafone’s CFO said he understood sums involved were large, but pressed for
urgency in the matter.

‘The government has clearly got a fiduciary responsibility to make sure it
protects its end, but if there was some way of the process getting sped up it
would be extremely helpful,’ he said.

‘It’s been seven or eight years now trying to get clarification on this,’
said Halford. ‘[Vodafone has] been through the UK system, we have got to the top
of the UK system. It has been referred to the European system, the guidance in
the European system has then been applied at the bottom end of the UK Courts and
we go back up the UK Court process, and on almost all rounds of that we have
won, we tied or won. From our point of view to have things hanging around… you
know, we really would prefer to get on and get them solved.’

The Treasury said it could not comment on legal cases.

With the situation still unresolved and with only 4% of Vodafone’s profits
coming from its UK business, Halford stopped short of saying the company would
remain onshore in the UK for tax purposes.

‘We are not going to take lightly a decision to go and move somewhere else
but we do really need to have a dialogue with the government to make sure that
we are getting that right balance between making sure that it is a tax-friendly
place to work, while accepting clearly the government has got to raise taxes to
run the country.’

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