Saturday, 21 January 2012

The bullshit that is both India and Vodafone, and ...

... throughout the world.

The narrative, courtesy The Times 21 Jan 2012, there is more if you pay the tariff £ .....
It has taken four years of fighting but last night Vodafone was celebrating a landmark legal victory after the Indian Supreme Court ruled that it would not have to pay a £3.1 billion tax bill.

The ruling centred on Vodafone’s £7.1 billion acquisition of Hutchison Whampoa’s majority stake in Hutchison Essar in 2007 and was declared a “thumping judgment” by Harish Salve, the company’s lawyer. It is expected to open up the region to more foreign investment.

The Indian Government had claimed that it was owed tax because the assets bought had been bought in India. Vodafone argued that both the buyer and seller were based overseas and the deal had been conducted via offshore holding companies. It also said that, since it was the buyer of the asset, it should not be liable for a tax on the profits from the sale.

The Supreme Court ruled yesterday that “Indian tax authorities had no jurisdiction to tax Vodafone”.

The Supreme Court of India is of course a Logical Ass.

My reasoning relates not to ownership, but to location, if a business is located in Delhi, then the business as an asset should be taxed in Delhi, without exception.

This type of nonsense occurs in the UK, an offshore company owns assets and pays little or no tax because of domicile.  If politicians were not spineless creatures, there would be an alternative Davos where such practices would be by common agreement outlawed throughout the world, there is no logic in failing to tax a process other than where the process happens.  If you sell it here you pay the taxes here ...... simple.

If companies are able to avoid paying taxes to the country it creates its wealth, then the politics of that country is probably corrupt, if the politics is suspect might not its Supreme Court be also suspect, there is an enormous smell wafting from the East.  But it is not just from the East that smells waft, our very own tax collectors let the very same Vodafone off the hook to the tune of a £6bn tax bill, we need to remember the efforts our very own HMRC are using to claw back taxes from the little people of Britain.


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