Vodafone is in dispute with tax authorities in Germany over an attempt to reduce the value of the business by €50bn. This loss could then be offset against future tax demands.

The write-down relates to the purchase of German telco Mannesmann four years ago. Vodafone says falling telco stocks mean the company should be allowed to make the write down. Mannesmann shares were valued at €309 per share when transferred to Vodafone's German business. This was later reduced to €200.

Vodafone's takeover of Mannesmann remains controversial in Germany, where six senior executives have been charged with breach of trust over the takeover. Executives received bonuses totalling some €57m.

The write down is normal practise but German officials are questioning whether the fall in share price represents a permanent reduction in value. ®

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