Vodafone enters multinational tax row
The Government and mobile phone giant Vodafone AirTouch exchanged blows yesterday over controversial Treasury plans to outlaw multinationals channeling earnings through offshore subsidiaries.
Chris Gent, chief executive of Vodafone, threatened to move the headquarters of the UK’s largest multinational abroad unless the Treasury backs down from Budget proposals to ban tax mixers, which allow UK companies to avoid paying extra tax on income earned abroad.
Government officials stood firm and stated that policy would not be dictated by one company – even if it is Britain’s largest.
FTSE 100 company’s have expressed deep opposition to losing their ability to minimise British tax on profit from operations in low corporation tax countries.
Gent sent his broadside as he sealed the sale of Vodafone subsidiary Orange to France Telecom for £25bn cash and £6bn shares.
Vodafone, which had a market capitalisation of £185.9bn earlier this year, paid the Treasury around a massive £6bn in the Government’s mobile phone license auction.