POAHY Porsche Automobile Holding SE (PK)

The upper house of the German parliament has asked the government to examine a loophole in German tax legislation that would allow auto maker Volkswagen AG (VOW.XE) to save an estimated 1.5 billion euros ($1.9 billion) in taxes if it acquires the rest of sports car maker Dr. Ing. h.c.F. Porsche AG, news agency DAPD reports Thursday.

The financial committee of the upper house has approved a motion from three German federal states, the finance and economics ministry of Baden-Wuerttemberg said. The motion asks the federal government to examine if it is possible to preclude "undesirable arrangements" by changing the law on taxation for mergers and acquisitions, the report says.

The law contains a loophole that would allow Volkswagen to avoid paying taxes if it acquires the 50.1% in Porsche AG it doesn't already own from Porsche Automobil Holding SE (PAH3.XE), DAPD reports.

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