Vodafone slams India for tax blow
Vodafone sked India's top court to stop the government from fining it over a $2.5 billion tax bill and warned the row could discourage foreign investors, reports the Age.
The fine is associated with an additional $2.5 billion tax bill that India said Vodafone owed in October after a reevaluation of the company's $11.1 billion purchase four years ago of a 67-percent stake in Hong Kong-based Hutchison Whampoa's Indian mobile unit.
Vodafone is, naturally, not keen to pay the extra tax. But what's really got the company steamed is India's move to impose an additional penalty of as much as 100 percent of the outstanding tax (i.e. anothter $2.5 billion).
"The position being taken by the tax authorities is both unprecedented and also out of step with international taxation principles governing acquisitions, which are designed to encourage investment," the newspaper quoted a Vodafone statement as saying.
It also said that an unpredictable tax environment would likely discourage foreign investment, which plunged in the past year amid investor concern over widespread corruption, bureaucratic delays, a lack of economic reform and an uncertain regulatory climate.
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