How To Save $1.9 Billion In Taxes, The Volkswagen Way
For all intents and purposes, Porsche is part of Volkswagen. Except for one niggling detail: Officially, Porsche still owns Volkswagen, and not Volkswagen Porsche. See complicated graph. Volkswagen had planned to swallow Porsche whole, and to add it to Volkswagen’s large collection of brands, but there were some nasty details. The most worrisome detail is solved: The tax bill.
Buying Porsche would have been a taxable event to the tune of some $1.9 billion. This had bothered Volkswagen to no end, and its legal team looked for a way out. The way has been found, says Wirtschaftswoche. The out has its price: €118, or $148. That’s the price of one share of Volkswagen stock.
Under the new deal, Porsche SE receives €4.5 billion, and one Volkswagen share. If a share changes hands, then it’s not a sale, but a tax-free restructuring. Schlau, nicht wahr?
The other problem is that hedge funds the world lover are suing Porsche for insider trading, and Volkswagen does not want to buy that risk. Instead, VW will buy the Porsche sports car business and will leave an empty shell behind. Tax-free.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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So in the end, Porsche really DID end up with a (barely) controlling interest in VW - I thought they never quite made it that far. But let's face it, BOTH companies were ultimately controlled by various factions of the same family, so this is all inter-family squabbling and nothing more. But it looks like they have some sharp accountants! Personally, I give them a big high-five for putting the screws to the various "masters of the universe" finantial wizard boys. Those lawsuits are a complete waste of time and energy.
Charles Widmore, you sneaky billionaire you. Trying to avoid taxes so you can get back to the island.