London, 20 January – The UK office of the International Chamber of Commerce (ICC UK) has welcomed the Indian Supreme Court’s judgment in the Vodafone tax case.
The Court today ruled that India’s tax office has no jurisdiction over Vodafone’s $11bn purchase of mobile assets in India.
Commenting on the judgment, Andrew Wilson, Director of Policy at ICC UK, said:
“The ruling is welcome news for international firms which have been following this case with some nervousness. The judgment brings Indian tax practice back into line with established international norms and, in doing so, removes the spectre of international transactions being burdened by duplicative tax bills”.
“The biggest winner in this case may well turn out to be the Indian economy. Many companies have held-off acquiring Indian assets in recent years because of the uncertainty created by the Vodafone dispute. Recent figures show that inward investment in India fell around 20% in 2011. The Supreme Court’s ruling should go some way to improving the investment environment in India”.
Mr Wilson concluded by emphasising the international dimension of the ruling:
“Our major fear has been that other jurisdictions might follow the novel approach of the Indian tax authorities in the Vodafone case. Today’s judgment should be read as a clear endorsement of the view that countries don’t have jurisdiction to tax international transactions based on the location of underlying assets”.
Notes to editors:
1. The International Chamber of Commerce (ICC) is the largest business organisation in the world. As a global organisation, we work to further international trade by promoting open markets, sensible regulation and the rule of law. Members of ICC in the UK include the majority of FTSE 100 companies, as well as many SMEs.
2. For media enquiries, please contact Andrew Wilson on: +44 (0)20 7838 7458 or +44 (0)7860 560 330.
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