Vodafone Switzerland exposed as £1.6bn tax avoidance sham

  • Only Swiss employee is part-time bookkeeper
  • Vodafone takes up just 5% of his time
  • Office rarely used; orders come from Luxembourg

An undercover sting has exposed Vodafone’s operation in Switzerland as a sham designed to avoid tax. While the telecoms giant contrives to have an “office”, this is rarely occupied – with their affairs in the country being run by a single part-time bookkeeper.

Undercover reporters from the Bureau of Investigative Journalism and Private Eye filmed a Swiss manager spilling the beans on the firm’s operations in Switzerland, casting further doubt on the legitimacy of Vodafone’s already suspect tax affairs.

One of Vodafone’s companies with profits of £1.6bn was taxed less than 1% in 2011 — by using a legal avoidance technique in which a Vodafone subsidiary in Luxembourg attributes profits to a Swiss branch. However the company does not own its own mobile network in the country.

The accountant told undercover reporters:

“We just do the bookkeeping… Vodafone is 5%, or not even 5% of my time … Once a year they come here, once or twice a year I go to Luxembourg”

Vodafone caused outrage in 2010 when it paid just £1.25bn tax in a “sweetheart deal” with HMRC, when it was widely believed that they owed £6bn. This saw them targeted by the activist group UK Uncut, and the government make a much-criticised pledge to crack down on tax avoidance.

Vodafone could relocate their “Swiss operation” to the interior of a cuckoo clock.

One Comment

  1. [...] of Vodafone’s companies with profits of £1.6 billion was taxed less than 1% in 2011, Political Scrapbook reports — the video suggests that this tax rate was &#97&#99&#104ieved by running a mock office in [...]

  2. “Vodafone caused outrage in 2010 when it paid just £1.25bn tax in a “sweetheart deal” with HMRC, when it was widely believed that they owed £6bn. ”

    Yep, carry on saying a lie on the basis that if you say it often enough people might believe it. It has been catagorically shown to be totally above board and the Private Eye article getting every single bit of accounting wrong.

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