British telecom major Vodafone filed an appeal on Tuesday to Indian’s Supreme Court against a ruling that it is liable for up to US$2.6bn in taxes.
A few days ago, an Indian court ruled that authorities were allowed to seek a Rs 120bn (US$2.6bn) tax bill…
British telecom major Vodafone filed an appeal on Tuesday to Indian’s Supreme Court against a ruling that it is liable for up to US$2.6bn in taxes.
A few days ago, an Indian court ruled that authorities were allowed to seek a Rs 120bn (US$2.6bn) tax bill from Vodafone International, a Dutch subsidiary of Vodafone, on its US$11.2bn acquisition of Indian telco company Hutchinson Essar in 2007.
Shortly after the ruling, a Vodafone executive had told journalists that the company would think seriously about appealing the decision to India’s Supreme Court.
The company has been trying to fight the tax bill for several months now, saying its subsidiaries in Mauritius and the Cayman Islands, where the stake changed hands, were fully functional companies. Because India has a double taxation treaty with Mauritius, investments made in India from the country are not subject to tax, argued the company.
But the Indian Income Tax department said that the deal not only involved the transfer of shares but also a transfer of rights, such as management control, rights on brands and rights to conduct business in India, allowing the country to claim tax on the transaction.
