• Thursday, November 14, 2019

Huge Tax Bill

Discussion in 'Pakistan Economy' started by Hafizzz, Oct 23, 2010.

  1. Hafizzz

    Hafizzz SENIOR MEMBER

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    I cannot believe in what India did - Giant Tax Bill.
     
  2. hellofriends

    hellofriends BANNED

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    income tax department is right....and vodafone should pay tax. i am a management student i know the actual case. but you don't worry this tax will not borrow by pakistan, vodafone will earn more than it in one year.
     
  3. aristocrat

    aristocrat FULL MEMBER

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    ^^^hey could u explain a bit plz.
     
  4. Nothing

    Nothing FULL MEMBER

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    Yeah it is almost USD 2.5 Billion tax bill. It is capital gain tax.
    They tried to escape from it by transferring money outside India., but finally sell of entity (A company or stake in company) took place in India.
    It is very nice example set-up by GOI and I-T department . Other will also follow and will pay their taxes to government.

    And it is GIANT because transaction was also giant around USD 11,218 million . Tax is around 20% for profit for short term capital gain .
     
  5. somebozo

    somebozo ELITE MEMBER

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    David Camoron will regrett his appeasing statements. Because 2.5 bln outflow is likely to hurt vodafone and british jobs very much at this time of economic crisis! He asked for Indian steel and automotive now may be he will also include to list Indian tax breaks and cell phone businesses!
     
  6. StingRoy

    StingRoy SENIOR MEMBER

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    They can't cheat the Taxman.

    [​IMG]

    Even after paying the tax they will make a profit out of the whole deal. Thats how they were able to rise to #3 position in Indian market. They bought Hutchison Essar when they entered Indian market. Although it may have its implications on future Indian acquisitions, but nevertheless it also sends out a signal to foreign companies that they will have to play by the rules of the state. How was it an overseas deal when the whole operations of the company were in India.
     
  7. StingRoy

    StingRoy SENIOR MEMBER

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    Some excerpts from the NYTimes article linked below:

    Vodafone Is Liable for Tax on India Deal, Court Finds

    Indian tax authorities argued that Vodafone should have withheld capital gains taxes from the $11 billion it paid to Hutchison Whampoa for its 67 percent stake in Hutchison Essar, which is now known as Vodafone Essar, India’s third-biggest cellphone company by subscribers.

    Indian officials contend tax is owed on the deal because the assets sold are based in India.

    Though the ruling is unlikely to dissuade all foreigners from investing in India, one of the fastest-growing economies in the world, it will require them to evaluate any deal with a new risk and cost in mind: taxes.

    Most foreign investors who buy or invest in Indian companies do so through offshore entities to protect their gains from taxes. Even many Indian individuals and businesses use foreign shell companies to hide wealth and income from the government, critics say.

    India is not alone in going after such deals.

    Late last year, China issued a rule that made the sale of stakes in Chinese companies by offshore entities taxable in that country. The rule does not apply to the sale of shares that are traded on a public stock exchange.
     
  8. Nothing

    Nothing FULL MEMBER

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    It is nothing with outflow from UK. One company is doing transaction in India for Indian entity. If they are earning some profit they have to pay tax in India. How it will hurt British jobs ?

    Vodafone told that they are planing to invest this money in Briton to create job .... what a BS....

    In entire case nothing is related to David Cameron and its government.

    Please educate your self by reading this article

    Hutch deal: I-T Dept asks Vodafone to pay Rs 11,218 cr as tax - The Economic Times
     
  9. Nothing

    Nothing FULL MEMBER

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    Very true ... All companies use government infrastructure to do business. If they are doing business in India they have to follow Indian laws.

    There will be not much future implications because GOI is demanding tax on profit, it is not looting it from company without reason and all major countries have same king of taxation rules