| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Irish Last Updated: Aug 19, 2013 - 12:05 PM

Vodafone refunded UK after discovery of Irish tax haven deal
By Finfacts Team
Aug 19, 2013 - 9:32 AM

Email this article
 Printer friendly page

Vodafone, the British mobile phone giant, refunded an estimated  €67m to the UK's Revenue & Customs after the discovery of an Irish tax haven deal  that enabled the group on receipt of royalties at a shell company in Dublin, to transfer over €1bn in dividends to low-tax Luxembourg.

The Guardian newspaper reported on Sunday that in the period 2002-2007, Vodafone used an Irish registered company to collect hundreds of millions  of pounds a year in royalty payments from operating companies and joint ventures around the world.

The company was similar to arrangement disclosed by a US Senate panel last May, that Apple used Irish shell companies to transfer large multi-billion dollars sums to avoid payment of taxes.

The Apple disclosures triggered denials by the Irish Government that Ireland was a tax haven. However, a letter to the leading senators on the Senate Permanent Subcommittee on Investigations, received a swift smackdown:

Senator Carl Levin and Senator John McCain, responded to the Irish letter by saying:

"Most reasonable people would agree that negotiating special tax arrangements that allow companies to pay little or no income tax meets a common-sense definition of a tax haven."

SEE: Irish Government's foolish tax letter to US senators

Vodafone made a settlement in 2009 with Her Majesty's Revenue & Customs (HMRC) but it kept the settlement secret.

The overall size of the settlement has not been revealed but it involved Vodafone reclaiming €67m from the Irish government in tax that should have been paid in the UK, the Guardian reported.

By 2007, Vodafone Ireland Marketing Ltd (VIML), a company registered to an industrial estate in the Dublin suburb of Leopardstown, was reporting a turnover of €380m (£320m) a year.

During a four-year period, these royalty payments, collected from most countries except the UK and Italy, had helped Vodafone send more than €1bn worth of dividends to the low tax jurisdiction of Luxembourg from Dublin. The dividends, which include a final payment of €142m due to be delivered this year, came from profits made after taking advantage of Ireland’s low corporation tax rate.

By 2007, Vodafone decided to move some staff to Dublin when it appeared that the HMRC became aware of the arrangement. 

Throughout the period covered by the settlement, the profits of VIML had been taxed by the Irish authorities at the rate of 25%, the UK-based mobile phone group said.

In accordance with the Treaty between the UK and Ireland which prevents double taxation on the same income, the Irish government credited taxes previously paid by Vodafone and these were then paid to the UK Treasury as part of the overall settlement, the company added.

The Guardian said: "The Irish accounts illustrate one important advantage: if the firm could show it was "carrying out trading activities" from Dublin, the corporation tax rate would be halved.

According to the 2008 company filings: "Following the establishment of the global brand management function in Ireland the activities of the company have increased. A confirmation has been obtained from the Irish Revenue that the company is now carrying out trading activities and, accordingly, subject to the corporate tax rate of 12.5%." The rate would apply from 1 November 2007."

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Latest Headlines
Ryanair revises up full-year profit guidance
AIB bank profitable in third quarter
Ryanair announces half-year profits up 32% to €795m
Ryanair benefits from improved customer service
Ryanair to buy 100 new Boeing 737 MAX 200
Finfacts server migration Thursday
State-owned Allied Irish Banks reports H1 2014 profit as bad loan charges plunge
Ryanair reports profit in its financial first quarter soared 152%
UK firm opens van dealership in Dublin
Ryanair reports 8% fall in full-year profit; US services to commence in 2019
Global Financial Centres Index: New York overtakes London; Dublin slips to 66 of 83 cities
Bank of Ireland reports “significant” improvement in 2013 results
Sale process of IBRC UK projects Rock and Salt completed
CRH says 2014 will be year of profit growth after reporting 2013 loss
Ryanair reports third-quarter loss
Irish Water says it saved €100m in setup costs
RSA Insurance fires two Irish executives for large loss/ accounting irregularities
Bank of Ireland will have to raise provisions by €1.4bn; AIB says it's "well capitalised"
CRH reports slightly improved third quarter
Central Bank says ownership of Newbridge Credit Union transferred to permanent tsb
Ryanair reports H1 profits rose by 1% to €602m
Dublin Web Summit: Irish Stock Exchange and NASDAQ OMX announce dual listing plan
Irish pension managed funds returned to growth during September
Dan O’Brien resigns as economics editor of The Irish Times
Central Bank says no action required on Anglo tapes revelations
Ryanair flew 9m passengers and Aer Lingus carried 1.1m in August
UK Competition Commission says Ryanair must cut Aer Lingus stake to 5%
CRH reports H1 2013 revenue dip and loss
Vodafone refunded UK after discovery of Irish tax haven deal
RBS reports half year profit; Ulster Bank posts reduced loss
Bank of Ireland cuts pretax losses in HI 2013 to €504m
Irish State-owned Allied Irish Banks reports losses of €758m in H1 2013
Service Announcement
Irish managed pension funds declined in June
VHI reports 2012 surplus of €54.3m; Health insurance made loss
Ex- Elan director says management / board "not competent to run a business"
Aer Lingus to put €140m in employees pensions fund; Ryanair apoplectic
Wednesday Newspaper Review - Irish Business News and International Stories - - May 22, 2013
Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m - - up 13%