Vodafone claims £17.67bn in tax losses

Vodafone claims £17.67bn in tax lossesTelecom giant, Vodafone has claimed a massive £17.67 billion in tax losses allowing its first half profit rise significantly.

The company said that most of the tax losses or about £15.83 billion came from its subsidiary in Luxembourg that has been accused of being involved in tax avoidance scams. The company sends of dividends to Luxembourg for taking benefit of tax laws in that country. Vodafone has shifted senior marketing managers to Dublin in order to avoid g UK tax on revenues from global royalties.

The company has dismissed suggestions that it was avoiding tax but said that its move does not affect the amount of tax it pays in cash anywhere in the world. The company recorded a pre-tax profit in the six months till September at £1.51 billion but it’s deferred tax losses resulted in post-tax profit rising to £15.71 billion.

The company decided to claim tax losses amounting to £15.83 billion from Luxembourg and £1.84 billion from Germany. The company also claimed that it has accumulated the tax losses over many years and is calming this year.

The chief financial officer Andy Halford said "accounting rules require us to put a value on the balance sheet" given the change to the group because of the Verizon deal. He said Vodafone was not trying to avoid corporation tax by claiming the tax losses. "It's nothing to do with it. It's all perfectly above board."