Tax Loophole on VW's Porsche Takeover to Be Examined - Report
22 June 2012 - 2:06AM
Dow Jones News
The upper house of the German parliament has asked the
government to examine a loophole in German tax legislation that
would allow auto maker Volkswagen AG (VOW.XE) to save an estimated
1.5 billion euros ($1.9 billion) in taxes if it acquires the rest
of sports car maker Dr. Ing. h.c.F. Porsche AG, news agency DAPD
reports Thursday.
The financial committee of the upper house has approved a motion
from three German federal states, the finance and economics
ministry of Baden-Wuerttemberg said. The motion asks the federal
government to examine if it is possible to preclude "undesirable
arrangements" by changing the law on taxation for mergers and
acquisitions, the report says.
The law contains a loophole that would allow Volkswagen to avoid
paying taxes if it acquires the 50.1% in Porsche AG it doesn't
already own from Porsche Automobil Holding SE (PAH3.XE), DAPD
reports.
Write to the Frankfurt Bureau at
djnews.frankfurt@dowjones.com
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