Volkswagen acquires Porsche for £3.6bn and avoids paying taxes due to loophole

[MoneyMagnetMagnate]

After years of wrangling, Volkswagen and Porsche sidestep lawsuits and the taxman to agree a 'merger deal' worth billions.

The subsequent merger attempt brought fears of a £800bn tax assessment but was avoided through a loophole which classified the deal as a restructure and not as a takeover.

The two firms agreed the latest deal after receiving a ruling response from the German tax authorities.

Volkswagen In £3.6bn Porsche Purchase Deal

[jimbo13]

Large Companies don't bother with little things like Tax 3M

Dan

[Dan Riffle]

As long as they followed the law, good for them.

[Halcyon]

I don't see anything wrong with tax avoidance, tax evasion is the problem.

If there's a legal loophole that can save money why not take it? More people should do the same. The way I see it, if you're not taking every LEGAL deduction you're entitled to then you want to give the taxman your money and have no business complaining.

My real concern is the future of Porsche, remember how messed up Jaguar became? Now a Jaguar it's just a Taurus with a cat on the hood.

So will a Porche now come with flowers on the dash?

[seasoned]

Halcyon is right. Even some very poor pay more tax than they should. They don't understand the hassles of taxes because they don't see what the government is taking, and file the simple, quick, AND EXPENSIVE 1040ez.

As for the restructure, etc... Aren't porsche and VW historically tied anyway?

Steve

[Formal Shorts]

Originally Posted by seasoned

Halcyon is right. Even some very poor pay more tax than they should. They don't understand the hassles of taxes because they don't see what the government is taking, and file the simple, quick, AND EXPENSIVE 1040ez.

As for the restructure, etc... Aren't porsche and VW historically tied anyway?

Steve

If my pub quiz memory serves me correctly, Mr Porsche designed the Beetle.

[John Durham]

Originally Posted by Halcyon

My real concern is the future of Porsche, remember how messed up Jaguar became? Now a Jaguar it's just a Taurus with a cat on the hood.

.........Thanks.

[MoneyMagnetMagnate]

Originally Posted by seasoned

Halcyon is right. Even some very poor pay more tax than they should. They don't understand the hassles of taxes because they don't see what the government is taking, and file the simple, quick, AND EXPENSIVE 1040ez.

As for the restructure, etc... Aren't porsche and VW historically tied anyway?

Steve

Quite historically tied, considering Ferdinand Porsche was the designer of the original Volkswagon, that became the "Beetle" - the "People's Car" Hitler wanted everyone to have. The two were married, then divorced, then married, then...they remained friends...
In the US for instance, on the 914 and similar models, the Porsche badge just said 'Porsche', while in Europe it said 'Porsche-Volkswagon'...no one in the US wanted to think of their "Porsche" as a VW...(when VW came to the US in the 50's, they couldn't give them away, but Porsche had a niche) The 60's and "Herbie" changed all that.

I don't necessarily begrudge the reunion of the two - they belong together like Taylor and Burton, but it always strikes me how easy it is for a large corporation to 'circumvent' a situation with the change of a paragraph, or amending an agreement that didn't say this, so now that means this...oh look! That just saved us 800bn...how convenient

[seasoned]

WOW. ADMITEDLY, I was just a little kid. I barely remember the car we had before the VW. But I am pretty sure we got the VW BEFORE herbie was in the movie theaters! A family friend got a 1971 one NEW. He owned a good sized boat, TONS of guns, fishing poles, etc... A HOME, rented his own apartment, AND ran a fairly large business that did business with lots of companies including the US military. I think he could have afforded a bigger car. BTW the apartment and business were in LA county, and the home was in kern county, which is why he owned a home AND rented.

But the VW was known as low end utilitarian, and Porcshe was high end sports, so the names didn't fit together. That is true in most cases.

Steve

[MoneyMagnetMagnate]

Originally Posted by seasoned

WOW. ADMITEDLY, I was just a little kid. I barely remember the car we had before the VW. But I am pretty sure we got the VW BEFORE herbie was in the movie theaters! A family friend got a 1971 one NEW. He owned a good sized boat, TONS of guns, fishing poles, etc... A HOME, rented his own apartment, AND ran a fairly large business that did business with lots of companies including the US military. I think he could have afforded a bigger car. BTW the apartment and business were in LA county, and the home was in kern county, which is why he owned a home AND rented.

But the VW was known as low end utilitarian, and Porcshe was high end sports, so the names didn't fit together. That is true in most cases.

Steve

Of course the VW was here before "The Love Bug" movie - but "Herbie' gave the car a persona of 'cute' - it was a great car when it arrived in the 50's, easy to work on, inexpensive, but the country was in expansion, and many still had the memory of WWII and Hitler in their mind - they were averse to the idea of little foreign cars, especially with one so closely associated with Hitler. In the early 60's, they worked hard to overcome that. Nissan and Honda faced a similar problem. Nissan called itself "Datsun" in the US, because they thought it sounded less Japanese, it was a Nissan everywhere else...

If you look at the engineering of VW and Porsche, they are very similar if not identical in design in many aspects. They have the same heritage.

With the big American Cars of the era, the VW was the antithesis of that, and sort of went 'counter-culture'. In 70-71' like you mentioned, Datsun had a heck of a time competing against the American Muscle cars. Porsche, on the other hand was already an exotic, and in a different class of car and driver.