Vodafone pays £350m in Indian tax dispute
November 16, 2010
After a three year legal battle, Vodafone was told yesterday that it must pay £350m in back fees for its tax dispute with the Indian government.
The UK telecom firm has been given three weeks to make the payments after it lost a court case against Indian authorities over its capital gains taxes from its 2007 acquisition of Hutchison Whampoa’s mobile company.
A spokesman for Vodafone said that the telecommunications company will comply with the ruling and that it was part of the judicial process. He also said that should the case be appealed in Vodafone’s favour, it will receive the money back with interest. Furthermore, the spokesman added that Vodafone was confident that the ruling will show that there was no tax liability on its firm from the 2007 purchase as all legal counsel had remained in line with that view.
The Supreme Court will convene a new hearing on 24 February, however, Vodafone said it hopes to settle the case out of court. India is at the centre of Vodafone’s plans to expand because of its quickly growing economy.
The UK telecom firm recently offloaded a stake in Japan-based SoftBank as well as its interests in China Mobile. With the recent surge in capital, Vodafone will reinvest its interests in India further. Chief executive Vittorio Colao said he expects Vodafone’s Indian business to surpass its European ventures.
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