Andy Halford, CFO of Vodafone Group, said the company could receive an annual dividend of up to US$5.5 billion from its stake in Verizon Wireless from next year onwards, the Financial Times reports. The figure is based on the US$12 billion the US operator currently generates in free cash flow, which in recent years has been used to pay-down its debt, rather than paid to its shareholders – dividend payments to parents ended in 2005. While talk about the resumption of dividends from 2012 is not new, so far neither Verizon Communications nor Vodafone has discussed the sums which may be involved. Verizon previously has said it will “sit down with the board and see what a fair and reasonable dividend is.” According to the report, Vodafone generated £7.1 billion of free cash flow in the most recent financial year, meaning the Verizon dividend will boost this by “almost 50 percent” – and thereby significantly improving the returns for Vodafone shareholders.

Halford (pictured) also addressed the company’s long running tax dispute with the Indian authorities, related to its acquisition of a majority stake in Vodafone Essar in 2007, describing the US$2.6 billion liability at the heart of the discussion as “inequitable.” According to local publication Economic Times, Halford argues that the deal “is not governed by Indian tax rules and the consequence of that is that there is no tax that is payable,” and that “we would observe the party that made the profit was not us and therefore, the party that should be paying the tax is not us.”  The Indian authorities have argued that Vodafone should have withheld a sum to cover tax when it acquired the Vodafone Essar stake from Hutchison Whampoa, instead of paying it the full purchase price. Vodafone has noted that due to the structure of the companies involved, the deal was done outside India by two foreign businesses.