What is even more exaggerated is that because of this dispute, the Tianzhu Taxation Bureau used Congress to amend the tax law and suspended 69 bilateral investment agreements. Don't look back even if you hit the wall. Stay firm to the end.
The truth is this.
The Tianzhu Taxation Bureau required [Vodafone Group] to pay a tax of 120 billion rupees. When [Vodafone Group] refused to pay, it first froze its deposits of 25 billion rupees.
[Vodafone Group] was dissatisfied and filed a lawsuit. The Supreme Court of Tianzhu saw that this had no legal basis, so it ruled in favor of [Vodafone Group] and lifted the withholding obligation imposed by the Tianzhu Tax Bureau on [Vodafone Group]. The Tianzhu Tax Bureau had previously requested Vodafone's decision to withhold 120 billion rupees in taxes was revoked, and it also requested that the 25 billion rupees in deposits previously withheld be returned, plus a return of 4% interest per year.
Seeing the money they received disappear, the Tianzhu Tax Bureau was certainly not convinced, so they encouraged Congress to pass the 2012 Finance Bill to amend the income tax law and add several clauses. According to these new clauses, [Vodafone Group] not only has to pay taxes, but also Also have to pay a fine. Taxes and penalties totaled $3.3 billion.
What makes people even more speechless is that the Tianzhu Taxation Bureau said that this is not a new regulation, but a clarification of some statements in the existing tax law. It should take effect from the effective date of the existing tax law, which is 1961, retroactively 50 years.
Well, it’s 50 years!
It came into effect just one year before the 1962 invasion to defend the capital.
Why doesn’t the Tianzhu Tax Bureau date this tax law back to 1947?
In that year, didn’t Tianzhu’s founding father rely on the uncooperative spirit of “If you don’t let me be independent, I’ll starve to death to show you”, didn’t he succeed in founding the country?
The Tianzhu Congress amended the tax law, and the tax bureau appealed accordingly. When the Supreme Court saw that it had a legal basis, it changed its position and ruled in favor of the Tianzhu tax bureau. The Tianzhu Tax Bureau once again required Vodafone to pay back taxes, late fees and fines. The three items increased to US$5.1 billion, doubling the original tax amount.
Now the whole world is in a panic. Looking back 50 years, how many old accounts will be uncovered? This is not a matter for Vodafone alone. It involves countless multinational companies investing in Tianzhu. Even the U.S. Chamber of Commerce is getting involved.
Because it was already involved in an international dispute, [Vodafone Group] applied for arbitration based on the arbitration clause in the [bipa] (Bilateral Investment Promotion and Protection Agreement) that had been signed.
The arbitral tribunal held that based on the fair and equitable treatment requirements under BIPA, the Tianzhu government should ensure foreign investors a stable and predictable legal framework that is fair and procedural. The legal framework involving foreign investors must be constantly revised, and the revisions must be transparent and not arbitrary.
This is not a clarification by the Tianzhu government, but adding new content. Moreover, there are many unclear points in the content you added. There will be more clarification to be done later.
Doesn’t this make investors confused?
No matter which transaction was originally reasonable and compliant, the Tianzhu government considered it a "fat sheep", so it unilaterally declared that the transaction party was "illegal" and would be fined and taxed!
Therefore, on September 25, 2020, the international arbitration tribunal passed a ruling, supporting [Vodafone Group]’s claim and ruling that the Tianzhu government’s previous practices violated the fair and equitable treatment standards under the Tianzhu Netherlands Bipa.
The arbitral tribunal required the Tianzhu government to return the costs related to the [Vodafone Group] litigation, which was approximately 850 million rupees. It said that the Tianzhu government ignored the Supreme Court's judgment and imposed tax obligations on the plaintiff, plus interest and fines, which violated fairness and justice under BIPA. and fair dealing principles.
The Tianzhu government should immediately stop the above violations of the bipa. If it fails to comply with the above bipa, it will bear international responsibility.
In fact, the Tianzhu government used many cunning methods to oppose the arbitral tribunal's ruling during the arbitration process.
However, under the threat of the big stick of international trade, they still gave in.
After this incident, the Tianzhu government immediately revised the relevant laws. Any bilateral agreements that could be terminated were terminated. Bilateral agreements that could not be terminated mentioned in the clauses that taxation was not under the jurisdiction. If the clauses could not be modified, the Tianzhu government would issue laws to expressly stipulate that taxation It does not fall within the scope of arbitration of the International Trade Disputes Arbitration Tribunal.
actually.
In essence, it makes sense for the Tianzhu Taxation Bureau to tax [Vodafone Group].
Although the companies traded by both parties are not companies registered in Tianzhu, these companies are all shell companies, and the real value is the companies they operate in Tianzhu.
What you are really trading are companies in our country. If you make a profit, I will charge a little transaction tax. Is it normal?
I thought to myself, this is normal!
But the problem is, there is no law that requires you to pay taxes in this situation!
You don’t have anything legally stipulated, but when you see it is profitable, you have to amend the law [to make money]?
Which company can stand this!
Regulations must be formulated in advance and made known to taxpayers so that taxpayers can fulfill their tax obligations.
In this case, the Tianzhu government amended the regulations afterwards and made them effective retroactively, making it difficult for foreign investors to fulfill their obligations. Especially for withholding agents, the withholding obligations must be clearly stipulated in the regulations when making payments. If it is not clear and the money has been paid, regulations are enacted afterwards to impose additional withholding obligations and take effect retroactively. Where can people deduct the money? Will the money already paid be taken back by others? The basic principle of law is that you cannot force others to do what you cannot do.
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The Tianzhu Kingdom dared to trick the consortium of its former suzerain and spiritual motherland, the Great Eagle Kingdom!
How dare Wu Siyuan let [Chaoqun Group] invest in a country with such an uncertain business environment?
No matter how profitable it is, it's just a poisonous apple.
Wu Siyuan was afraid that he would not survive if he ate it!
Thinking about China's past business environment, foreign businessmen were really praised to the heavens.
But it has to be said that it is precisely this extremely friendly environment for foreign businessmen, coupled with the national spirit of self-improvement, that the domestic economy has been able to develop at a rapid rate in those ten years, and finally developed to the present. There is no need to rely too much on foreign businessmen, the privileges of foreign businessmen are gradually being eliminated, and the lives of the people are getting better and better.
Looking at it from Wu Siyuan's perspective, although he suffered a lot of grievances during that period, from a general perspective, it was worth it.
To describe it in four words, it is [bearing the humiliation and bearing the burden]!
To use a famous person to describe it, it is [Yue King Goujian]!
The country of China can make such a big sacrifice for economic development, but the country of Tianzhu, a country that made its leaders think about it for ten days and nights, could not do this.
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