How To Save $1.9 Billion In Taxes, The Volkswagen Way

Bertel Schmitt
by Bertel Schmitt
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.

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  • Krhodes1 Krhodes1 on Jun 09, 2012

    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.

  • Type57SC Type57SC on Jun 11, 2012

    Charles Widmore, you sneaky billionaire you. Trying to avoid taxes so you can get back to the island.

  • Wjtinfwb I can hear the ticking from here...
  • Daniel Bridger When y'all going to learn that nothing is free?
  • MrIcky This vehicle had so many delays, then a poor launch, and then the recalls- but I look at the recall for lugnuts and I wonder if you can miss the torque spec on those, what else did you miss? This car just seems very first gen to me. I'm glad it's out there. I like competition in this space, but I'd wait until the refresh on this one. Just one too many things.
  • Jalop1991 "Toyota and Daimler merging..."Wait--another merger of equals?
  • SPPPP Aggression is pretty much the reason that racing exists, so I am going to call this an unsolvable problem. It's a contrived scenario in which you take risks to get rewards. You may be able to improve it ... but never eliminate it.