All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

India still hunting Vodafone over Hutchison acquisition withholding tax

vodafone-logosmall.jpg

The Indian tax authorities are still arguing that UK-headquartered telecommunications multinational Vodafone must pay a $2.5 billion tax bill in relation to its 2007 acquisition of Hutchison Essar, the company has revealed.

Vodafone has confirmed receipt of a reminder from the Indian tax authorities that the original tax demand remains due from the company’s Hutchison Whampoa transaction in 2007, despite the Supreme Court’s decision in favour of the taxpayer in January last year.

In its Finance Bill 2012, which became law last May, the Indian government introduced retrospective amendments to the tax law which would allow it to tax any gain on the transfer of shares in a non-Indian company, which derives substantial value from underlying Indian assets.

Following fierce criticism, the government commissioned a committee led by Parthasarathi Shome to assess the appropriateness of the retrospective amendments.

In its report, the committee recommended that that retrospective application of the tax law should only be used in exceptional or the rarest of rare cases.

The Indian authorities’ continued pursuit of Vodafone suggests they are either paying little heed to the Shome committee’s report or that they consider the Vodafone transaction to be an exceptional case, and neither conclusion bodes well for Indian taxpayers.

Read further analysis on ITR Premium here.

More from across our site

This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree