Vodafone Luxembourg Tax Provision Rises To GBP1.8 Billion

LONDON -(Dow Jones)- Vodafone Group PLC (VOD), Europe's largest mobile telecommunications company, Thursday said it has increased its provision for a potential U.K. tax liability to GBP1.8 billion from GBP1.4 billion at the end of fiscal 2004.

The increase was disclosed in the company's annual report published Thursday.

Vodafone is involved in a disagreement with the U.K. Inland Revenue service about the taxation of its Luxembourg-based holding company, Vodafone Investments Luxembourg, for the year to March 31, 2001. Vodafone believes it shouldn't have to pay corporate tax in the U.K. on the Luxembourg unit's profits.

The disagreement has been referred to the European Court of Justice, but no judgment is expected before mid-2006.

Vodafone has increased the provision as the unit's profits have risen over fiscal 2005. It said it considers the provision sufficient, but won't know for certain until the court makes its judgment.

Company Web site: Http://www.vodafone.com

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

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Posted to the site on 9th June 2005