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

Bertel Schmitt
by Bertel Schmitt

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
Bertel Schmitt

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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  • 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.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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