To take advantage of tax benefits, Vodafone, had an office in Ireland with a turn over of 324 Millions Pound Sterling per annum.
Telecoms giant: Employing no staff for five years, Vodafone took advantage of Ireland’s generous corporate tax rate to record a £324million annual turnover collecting royalty payments for the use of its brand
The catch is this office had no staff between the years 2002 and 2007.
I used to wonder at the rate the Mobile companies are reducing the service charges in India.
Initially the companies were charging Rs.10 per SMS, it came down to 5, then 1 and now most of the service providers provide it Free, depending on the Plan(!)
I came to know that the charges per SMS is Paise one (charged by the BSNL) , the gateway provider in India, to these service providers.
Now even call rates have come down.
Still these mobile companies make a killing.
Now this story!
Not content with fleecing their customers, they are fleecing the general Public who are not their customers at all, by enjoying tax benefits not meant for them.
Vodafone has made a multi-million pound settlement with HM Revenue & Customs in the wake of a dispute over the tax it had paid in Britain, it emerged last night.
The information was revealed after it was reported that the company ran an Irish subsidiary from a satellite office in Dublin for tax purposes.
Employing no staff for five years, the telecoms giant took advantage of Ireland’s generous corporate tax rate to record a £324million annual turnover collecting royalty payments for the use of its brand
The UK-based group used the Irish subsidiary, which employed no staff between 2002 and 2007, to collect royalty payments from operating companies and joint ventures around the world.
During a four-year period, it emerged these royalty payments helped Vodafone Ireland Marketing Ltd send more than £850million worth of dividends to the low-tax jurisdiction of Luxembourg from their Dublin base.
The dividends, which include a final payment of £121million due to be delivered this year, came from profits made after taking advantage of Ireland’s tax rates.
The disclosure comes as the British mobile phone group came under fire for its minimal corporation tax payments in the UK.
It also emerged that it is the largest supplier of mobile phones to the UK government, with more than 30 departments and public bodies, including the prime minister’s office, having contracts worth £14million a year with Vodafone.
The Guardian newspaper reported that the accountancy structure struck by the multinational was similar to the one used by Apple in Ireland.