Vodafone Blames Government for $2 Billion Tax Dispute Talks Collapse
February 20, 2014 4:16 AM EST
Vodafone Group (VOD.L) blamed the government on Wednesday for the collapse of talks aimed at settling a $2 billion tax dispute relating to its acquisition of Hutchison Whampoa's (0013.HK) mobile business in the country.
A man and two passengers ride on a scooter past a shop displaying the Vodafone logo on its shutter in Jammu. Reuters
The finance ministry is preparing to seek the cabinet's approval to withdraw conciliation proceedings after Vodafone wanted a separate tax dispute to be made part of the talks.
"Vodafone entered into discussions with the Indian government in good faith and with a desire, as one of India's largest international investors, to achieve a fair outcome acceptable to both parties," Vodafone said following media reports on the government's move to scrap the talks.
"Throughout, Vodafone has responded to the government's queries in a timely manner, notwithstanding, at one point, a six-month delay by the Indian government in responding to correspondence sent by Vodafone," it said in statement.
Uncertainties over policy in India have unsettled investors, with tax claims on foreign companies a major concern. IBM (IBM.N), Royal Dutch Shell Plc (RDSa.L) and Nokia (NOK1V.HE) are among foreign firms contesting local tax claims.
Vodafone, the world's second-biggest mobile operator by subscribers, entered India in 2007 via the Hutchison Whampoa deal. It is contesting a tax bill of about 112 billion rupees relating to the acquisition.
The Supreme Court ruled in 2012 that Vodafone was not liable to pay any tax over the transaction. But the government changed the rules, allowing it to make retroactive tax claims on completed deals and drawing criticism from business groups.
The cabinet gave the go-ahead for conciliation talks with Vodafone last June. While formal talks are yet to begin, Vodafone and the government representatives had a series of meetings last year.
Vodafone had insisted that the conciliation talks include a transfer pricing dispute involving a unit offering call-centre services to group companies.
The government disagreed leading to its move to scrap the talks.
A finance ministry spokesman did not have any immediate comment on Vodafone's response.
Vodafone said in its statement it had made clear any resolution to the tax dispute would need to include all aspects of its acquisition of Hutchison assets and that New Delhi was seeking to tax one event twice by claiming tax on transfer pricing.
Most Popular Slideshows
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Chris Martin Getting Serious With Jennifer Lawrence, Actress Joining Coldplay Tour [PHOTOS]
- 2014 US Open Update (Day 4 - Men's Singles): Murray, Djokovic, Raonic and Isner Advance to 3rd Round [PHOTOS]
Join the Conversation
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans
- Teachers’ Strike in BC, Canada Stalls 1st Day of School; Labour Dispute Could Last Even After Labour Day
- Australia Races Against Potential Genocide In Iraq
- Ukraine Crisis: Putin Dangles Nuclear War Threat, US Senators Advise Sending Defensive Weapons
- James Foley Is A Spy – Jihadi Recruiter Reveals
- Apple iPhone 6 Actual Release Date after September 9 Confirmed 128GB Variant with New Resolution
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Moto G2 Release Roundup: Specs, Pricing, and Release Date Details
- PlayStation 4 Killing Xbox One Costing Microsoft Millions But It's Fine
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- Nexus 6 on Release Date Confirmed with Phablet-Size Display as FCC Filing Hints of 5.9-Inch Screen