Vodafone 2005 Annual Report Download - page 148

Investor Information continued
146 |Shareholder information
Documents on Display
The Company is subject to the information requirements of the US Securities and
Exchange Act of 1934 applicable to foreign private issuers. In accordance with these
requirements, the Company files its Annual Report on Form 20-F and other related
documents with the SEC. These documents may be inspected at the SEC’s public
reference rooms located at 450 Fifth Street, NW Washington, DC 20549. Information
on the operation of the public reference room can be obtained in the US by calling the
SEC on +1-800-SEC-0330. In addition, some of the Company’s SEC filings, including
all those filed on or after 4 November 2002, are available on the SEC’s website at
www.sec.gov. Shareholders can also obtain copies of the Company’s Memorandum
and Articles of Association from the Vodafone website at www.vodafone.com or from
the Company’s registered office.
Material Contracts
At the date of this Annual Report, the Group is not party to any contracts that are
considered material to the Group’s results or operations, except for its $10.4 billion
credit facilities which are discussed under “Operating and Financial Review and
Prospects – Liquidity and Cash Resources”.
Exchange Controls
There are no UK government laws, decrees or regulations that restrict or affect the
export or import of capital, including but not limited to, foreign exchange controls on
remittance of dividends on the ordinary shares or on the conduct of the Group’s
operations, except as otherwise set out under “Taxation”.
Taxation
As this is a complex area, investors should consult their own tax adviser regarding the
US federal, state and local, the UK and other tax consequences of owning and
disposing of shares and ADSs in their particular circumstances, and in particular
whether they are eligible for the benefits of the Old Treaty and/or the New Treaty.
This section describes for a US holder (as defined below), in general terms, the
principal US federal income tax and UK tax consequences of owning shares or ADSs in
the Company as capital assets (for US and UK tax purposes). This section does not,
however, cover the tax consequences for members of certain classes of holders subject
to special rules and holders that, directly or indirectly, hold 10 per cent or more of the
Company’s voting stock.
A US holder is a beneficial owner of shares or ADSs that is for US federal income tax
purposes:
(i) a citizen or resident of the United States;
(ii) US domestic corporation;
(iii) an estate the income of which is subject to US federal income tax regardless of its
source; or
(iv) a trust if a US court can exercise primary supervision over the trust’s administration
and one or more US persons are authorised to control all substantial decisions of
the trust.
This section is based on the Internal Revenue Code of 1986, as amended, its legislative
history, existing and proposed regulations thereunder, published rulings and court
decisions, and on the tax laws of the United Kingdom, all as currently in effect, as well
as on the Double Taxation Convention between the United States and the United
Kingdom entered into force in 1980 (the “Old Treaty”) and the Double Taxation
Convention between the United States and the United Kingdom that entered into force
on 31 March 2003 (the “New Treaty”). These laws are subject to change, possibly on
a retroactive basis.
The New Treaty has been effective in respect of taxes withheld at source for amounts
paid or credited on or after 1 May 2003. Other provisions of the New Treaty, however,
including capital gains tax, took effect for UK purposes for individuals on 6 April 2003
(1 April 2003 for UK companies) and took effect for US purposes on 1 January 2004.
The rules of the Old Treaty remained applicable until these effective dates. Moreover, a
taxpayer can elect to have the Old Treaty apply in its entirety for a period of twelve
months after the applicable effective dates of the New Treaty (if such a taxpayer would
be entitled to greater benefits under the Old Treaty).
This section is further based in part upon the representations of the Depositary and
assumes that each obligation in the Deposit Agreement and any related agreement will
be performed in accordance with its terms.
Based on this assumption, for purposes of the Old Treaty and the New Treaty and the
US-UK double taxation convention relating to estate and gift taxes (the “Estate Tax
Convention”), and for US federal income tax and UK tax purposes, a holder of ADRs
evidencing ADSs will be treated as the owner of the shares in the Company
represented by those ADSs. Generally, exchanges of shares for ADRs, and ADRs for
shares, will not be subject to US federal income tax or to UK tax, other than stamp duty
or stamp duty reserve tax (see the section on these taxes below).
Taxation of dividends
UK Taxation
Under current UK tax law, no withholding tax will be deducted from dividends paid by
the Company.
A shareholder that is a company resident for UK tax purposes in the United Kingdom
will not be taxable on a dividend it receives from the Company. A shareholder in the
Company who is an individual resident for UK tax purposes in the United Kingdom is
entitled, in calculating their liability to UK income tax, to a tax credit on cash dividends
paid on shares in the Company or ADSs, and the tax credit is equal to one-ninth of the
cash dividend.
If applicable, under the Old Treaty, a US holder was entitled to a tax credit from the UK
Inland Revenue equal to the amount of the tax credit available to a shareholder resident
in the United Kingdom (i.e. one-ninth of the dividend received) but the amount of the
dividend plus the amount of the tax credit were then subject to withholding in an
amount equal to the amount of the tax credit. A US holder, therefore, did not, in fact,
receive any repayment from the UK Inland Revenue in respect of a dividend from the
Company, although assuming the US holder was not resident in the United Kingdom for
UK tax purposes, there was no further UK tax to pay in respect of that dividend.
Under the New Treaty, a US holder is not entitled to a tax credit from the UK Inland
Revenue in the manner described above and dividends received by the US holder from
the Company are not subject to any withholding by the United Kingdom under the New
Treaty or otherwise.
US Federal Income Taxation
A US holder is subject to US federal income taxation on the gross amount of any
dividend paid by the Company out of its current or accumulated earnings and profits
(as determined for US federal income tax purposes). Dividends paid to a non-corporate
US holder in tax years beginning before 1 January 2009 that constitute qualified
dividend income will be taxable to the holder at a maximum tax rate of 15%, provided
that the ordinary shares or ADSs are held for more than 60 days during the 121-day
period beginning 60 days before the ex-dividend rate and the holder meets other
holding period requirements. Dividends paid by the Company with respect to the
shares or ADSs will generally be qualified dividend income.
A US holder that is eligible and elects the benefits of the Old Treaty, for dividends paid
prior to 1 May 2004 may include in the gross amount of income the UK tax withheld
from the dividend payment pursuant to the Old Treaty as described under