THE German Government is considering rewriting its tax law in the wake of complaints over Vodafone’s effort to win a huge tax break worth €20 billion (£13.3 billion).

Under the tax plan being discussed, Vodafone’s entitlement could be reduced by several billion euros if it is applied retrospectively. A string of German companies would also be affected.

Joachim Poss, deputy leader of Germany’s ruling Social Democrats (SPD), said yesterday the federal Government “was examining whether such an initiative makes sense”.

The SPD is coming under pressure to examine the issue, after the opposition Christian Democrats (CDU) successfully made the subject an issue in last week’s European election campaign. The CDU was a clear winner in the election, which saw the SPD poll a postwar low.

Vodafone has asked tax authorities in the country for a relief that dates back to its takeover of Mannesmann. The British group is taking advantage of a provision in German law that allows it to claim a break if the value of an acquired company is deemed to have fallen.

The mobile phone giant’s claim has attracted attention because of its sheer size and the fact that the claimant is not German. However, a string of German companies, including rival Deutsche Telekom, have applied for, and successfully claimed, the relief previously.

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