Reblogged from UKUncut
In this guest blog Richard Brooks, author of The Great Tax Robbery, explains why Vodafone’s tax dodge is still so scandalous.
Vodafone epitomises 21st century international corporate tax avoidance.
When the company took over German engineering company Mannesmann in 2000, it structured the deal using a Luxembourg holding company and twice as much internal debt than the whole group had really borrowed. This financial alchemy enabled it to funnel billions of pounds of otherwise taxable profit as interest payments from Mannesmann and other European operations into a Luxembourg company taxed at less than 1%. With tax dodging shaping the business, Luxembourg became (on paper) Vodafone’s most profitable territory without selling a single phone contract.
Under British tax law at the time, the profits of a UK multinational diverted into a tax haven would have been taxed in the UK. Indeed, the Labour government had not…
View original post 451 more words