It\’s amazing what tax abuse is these days, isn\’t it?

I’ve just noted their aggressive, and I think appropriate, response to Vodafone’s tax abuse, which they are tackling with retrospective legislation.

Let us just remind ourselves of the Indian Vodafone case. Vodafone bought a telecoms company off one of the Hongs (Hutchinson Whampoa I think?). The underlying assets were Indian, but the actual companies involved were offshore.

Vodafone itself never was charged tax on this matter. If anyone did owe tax then it was Hutchinson. But Indian law has the proviso that if the seller making a profit doesnt pay the tax then the buyer has to pay it for them.

Then, in the Supreme Court, it was decided that India didn\’t have the power to tax this transaction anyway as the actual entities being traded were not Indian. Nowt to do with the Indian taxman then.

But look at what Ritchie calls this: tax abuse. Not paying someone else\’s tax bill, as the Supreme Court says you don\’t have to, is tax abuse?

Eh?

3 comments on “It\’s amazing what tax abuse is these days, isn\’t it?

  1. I know this has been said here many times before, but Ritchie doesn’t recognise thing like Supreme Courts and ‘the law’ because he knows best and, as we know from his ‘book’ we must give him our money and he will spend it properly.

    Why do news outlets put this man on TV screens etc?

  2. Actually, Hutchison Telecom International (HTIL) did agree to indemnify Vodafone regarding the taxes :

    HTIL’s indemnity to Vodafone
    Now, why does all this matter to HTIL? Well, it turns out that in the original sale, HTIL indemnified Vodafone against a tax claim. This was not mentioned at the time in the announcement or circular regarding the transaction. It might have appeared in the agreement which was “available for inspection” in an office in Tsing Yi, New Territories, HK, for 14 days in Feb-2007, but we bet that nobody went to see it.

  3. “Actually, Hutchison Telecom International (HTIL) did agree to indemnify Vodafone regarding the taxes ”

    So what? It doesn’t change the analysis.

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