Vodafone told to deposit $550m in India tax dispute

15th Nov 2010 11:44

Telecoms giant Vodafone has been ordered to pay $550m (£340m) as a deposit against a possible $2.5bn tax bill in India.Vodafone has been given a 30-day deadline to pay the full tax bill, which relates to an acquisition three years ago, but the mobile giant is vigorously disputing the bill.The UK firm bought the Indian telecoms assets of Hong Kong conglomerate Hutchison Whampoa in 2007. It claims the $11bn deal is not subject to taxation as it was struck between two offshore entities and has appealed to the Supreme Court challenging a lower court order."Vodafone is confident that there is no tax liability resulting from this transaction, and all the tax and legal advice it has received remains consistent with this view," the company said in a statement on Monday.Even so, it has also been told to make a bank guarantee worth £1.18bn within eight weeks. The Supreme Court will sit again to hear the case on 24 February.Reports over the weekend also indicated that the Dutch authorities are willing to use their tax treaty with India to try to broker a settlement.