More misleading headlines?Posted 2013 by admin
I see that this morning’s Independent newspaper leads with the headline “Vodafone’s £84bn tax avoidance bonanza”.
This of course refers to the gain that Vodafone will make on the sale of its stake in American mobile phone company Verizon.
Following on from other similar stories of multi-nationals apparently avoiding taxes the tone of the headline again suggests that something underhand is being done to avoid taxes.
My understanding is that this is simply not the case, but why let the facts get in the way of a good headline? The US company’s shares are held in a Vodafone subsidiary based in the Netherlands and since when does the UK have the right to tax Dutch companies on their profits?
Moreover, even if the shares had been held in one of Vodafone’s UK companies it is likely that no UK tax would have been due as it would have fallen under the “Substantial shareholdings regime”.
Lets make no mistake here, Vodafone appear to be acting entirely within the law and if the law is not right then its up to the Government to amend it, not to criticize companies that are acting in accordance with the legislation that they themselves have put in place.
The views expressed here are those of the author and not necessarily those of the firm.