German auto manufacturer Volkswagen (VW) wants to integrate the sports-car maker Porsche’s as soon as possible, by August 2014. According to company sources, the deal would be free of tax because “the right time has to come.”.
However, neither party is interested to wait so long.
According to reports of Wirtschaftswoche, a Business weekly, Porsche SE found a way to sell the remaining 50.1% of its auto production plant to VW without paying an estimated 1.5 billion euros in tax.
Actually this agreement was made in August 2009 by the Volkswagen and Porsche after the making of the iconic 911 sports car which racked up more than 10 billion euros of debt attempting to buy Europe’s biggest car maker outright.
Because of some legal risks including lawsuits by short sellers in the United States (who claim that Porsche secretly piled up VW shares and later caused investors to lose more than $1 billion.
So, from that day both the car makers were exploring ways to integrate remainder of Porsche’s automotive business into VW, which bought 49.9 percent of the Stuttgart-based manufacturer for 3.9 billion euros in December 2009. Taxes would be payable when VW integrate or buy the remaining half of Porsche before August 2014.
Wirtschaftswoche also said that tax authorities had concluded the deal made by them was legally a restructuring and not a disposal that would require tax payments. Under the restructuring, Porsche’s holding company would receive a single voting share in VW as part of a 4.5 billion euro payment for Porsche’s car-making operations under the restructuring.