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German Press Review: Tax Tricks

German newspapers on Tuesday took a long, hard look at British company Vodafone, which acquired German mobile phone operator Mannesmann in 2000 and now plans to save up to €50 billion by way of exemption from taxes.

"Millions of Germans every day look into the abyss of the world economy", wrote the daily Der Tagesspiegel. "Vodafone is written on the display of their mobile phones, and this name stands for excessive greed, vain arrogance, a disrespect for the constitutional state and a ridicule of society." The paper reminded its readers that the former manager of German mobile phone operator Mannesmann, Klaus Esser, received €30 million in compensation for pushing up the share prices during the takeover battle between Mannesmann and Vodafone. "Now the British company plans to save billions of Euros in taxes by bringing the shares down to the ground again" and claims this to be a normal procedure, observed the paper. If this is normal, Der Tagesspiegel concludes, then we've all gone crazy.

The Berlin based newspaper Die Welt disagreed, insisting that the plans of the Vodafone company to write off €50 billion are perfectly in line with the law. But it drew two conclusions from the case. "First, if tax laws start to be too complicated, the state gets caught in its own loops -- in the case of Vodafone and other big companies this means that it doesn’t get taxes anymore." The paper went on to point out that "smaller businesses are not able to profit from these amazing legal possibilities" -- partly because they cannot afford huge, experienced legal departments. And according to the paper, that's what's really immoral about the case.

The Stuttgarter Zeitung puts the Vodafone scandal into a broader context. "It may seem singular because the group is so big and misuse in this case is extremely visible, but many companies try what Vodafone is currently trying -- to get the last drop out of the complicated German tax system." That's why the paper suggested the case should be seen as an opportunity for changes, demanding "German tax laws should be simplified and loopholes be closed, in return general tax rates could be reduced." The Süddeutsche Zeitung from Munich accused German politicians of being hypocritical when criticizing the Vodafone company, saying "The government speaks of 'offensive behaviour', the opposition even calls it 'preying on taxes'." But as the paper pointed out: "Who in fact enacted all these laws?" Indeed, "who has been tolerating for years that the German tax laws offer a wide range of loopholes to smart tax payers?" It has been known for quite a while, the paper pointed out, that big groups know a lot of tricks to avoid paying taxes.

  • Date 08.06.2004
  • Author DW-RADIO
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  • Permalink http://p.dw.com/p/5A1R
  • Date 08.06.2004
  • Author DW-RADIO
  • Print Print this page
  • Permalink http://p.dw.com/p/5A1R