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Be Open To Tax Talks, Vodafone Urges India

by Mary Swire, Tax-News.com, Hong Kong

26 May 2014


Vodafone chief Vittorio Colao has called on India's Government-elect to make good on its election promises and demonstrate "how open the country is again."

Colao told reporters in London that the introduction of retrospective tax legislation had been "really damaging to the Indian reputation." The changes to the Income Tax Act were implemented as part of Finance Bill 2012. They stipulate that shares in a foreign entity should be treated as being located in India if the foreign entity's profit substantially derives from India-based assets. The provisions were given retroactive effect from 1961.

Colao is optimistic that the Bharatiya Janata Party "will quickly do something to restore confidence in the country." As for Vodafone, its stance is "never adversarial." The company is willing to "engage in any conversation," Colao said.

Vodafone last month launched international arbitration proceedings in an effort to bring its long running dispute with the Indian tax authorities to a close. The now outgoing administration withdrew its offer for non-binding conciliation talks in response. Mobile phone manufacturer Nokia followed suit, announcing that it was seeking arbitration under the terms of India's investment treaty with Finland.

TAGS: compliance | Finance | tax | investment | tax compliance | India | tax avoidance | tax incentives | investment treaty | legislation | tax planning | Finland | Tax | Tax Evasion

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