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India hands Vodafone $2.5 billion tax bill

India hands Vodafone $2.5 billion tax bill

India's tax authorities told Vodafone Friday that it owes 112.18 billion rupees ($2.52 billion) in back taxes for the 2007 acquisition of the Indian telecom assets of Hong Kong's Hutchison Telecommunications International Ltd.
It is the first formal notice the tax department has given Vodafone of its liability, which is the subject of an ongoing legal battle scheduled to be heard in the Supreme Court on Monday.
The case is being closely watched by foreign companies that fear it will set a precedent that could make them liable for retroactive changes under Indian tax law.
Vodafone, whose joint venture with India's Essar group is one of India's largest mobile operators, maintains that it does not owe tax on the $11 billion transaction because it took place between two foreign entities.
"Vodafone strongly disagrees with the tax calculation," the company said in a statement Friday. "The tax authority is attempting to interpret Indian law as it has never been interpreted for the past 50 years, and this interpretation also goes against internationally recognized tax norms."


Updated : 2021-10-17 14:35 GMT+08:00