Vodafone to Pay $1.93 Billion to Settle U.K. Tax Suit Over Foreign Units
Vodafone Group Plc, the world’s biggest mobile-phone company, agreed to pay 1.25 billion pounds ($1.93 billion) to the U.K. to settle a lawsuit over taxation of its European units based outside of Britain.
The deal with U.K. Revenue & Customs calls for 800 million pounds to be paid in the current financial year with the rest to be paid in installments over the next five years, Vodafone said today in a statement about its first-quarter earnings.
Vodafone set aside 2.2 billion pounds to cover tax payments and interest in the case, the company said last year after it lost a Court of Appeal ruling. The dispute involved Vodafone’s Luxembourg unit and Britain’s so-called Controlled Foreign Companies laws relating to U.K. corporations that have units in European Union countries with lower tax rates.
“No further U.K. CFC tax liabilities will arise in the near future under current legislation,” Newbury, England-based Vodafone said in the statement. “Longer term, no CFC liabilities are expected to arise as a consequence of the likely reforms of the U.K. CFC regime.”
HMRC spokesman Patrick O’Brien didn’t immediately return a call for comment.