India asks IBM to pay $866 million in outstanding tax

[W.G.Ewald]

Indian tax authorities have asked IBM's Indian unit to pay 53.57 billion rupees ($866.20 million) in outstanding income tax on fiscal 2009 revenue, media reported on Saturday.

In an emailed statement, an IBM India spokeswoman confirmed the company had received a tax notice, but declined to comment on the amount of tax liability or the nature of the notice.

India's Income Tax office issued the company a notice for under-reporting revenue for fiscal 2009 by the Indian unit, the Business Standard newspaper said, citing a tax official.

India asks IBM to pay $866 million in outstanding tax: reports | Reuters

 

[drkrn]

no news in media till now???:shocked:

why only is ibm targetted.sure many more companies do follow the same policies....

 

[Free Karma]

It's been happening for a few years, Nokia, Vodafone, and a few other companies have been caught for tax evasion. Either because of the government not being sharp enoguh to notice they didnt pay their taxes (which lead to the govt levying retrospective taxes, and caused an outroar saying the country is not investment friendly) or outright tax fraud in the case of Nokia.

 

[drkrn]

It's been happening for a few years, Nokia, Vodafone, and a few other companies have been caught for tax evasion. Either because of the government not being sharp enoguh to notice they didnt pay their taxes (which lead to the govt levying retrospective taxes, and caused an outroar saying the country is not investment friendly) or outright tax fraud in the case of Nokia.

our laws allow it dude.our existing laws are probably decades old which need to be reviewed

 

[pmaitra]

I am waiting for these corporations to accuse the government of being business or investor unfriendly.

 

[TrueSpirit]

IMHO, retrograde taxation as being implemented in India is anti-investor in many ways. It is considered to be one of the main reasons behind negative FII sentiment.

 

[TrueSpirit]

I am waiting for these corporations to accuse the government of being business or investor unfriendly.

Diwali started there, yet...or tomorrow ?

 

[The Messiah]

Correct move by GoI.

They better pay taxes if they want to reap profits in India. SC agrees with GoI hence the vodafone judgement.

On another note good pay day coming up for lawyers

 

[sob]

Correct move by GoI.

They better pay taxes if they want to reap profits in India. SC agrees with GoI hence the vodafone judgement.

On another note good pay day coming up for lawyers

Sorry Vodafone won the case in SC, then the Government changed the law with retrospective effect. Which is very unfair from the Government. You cannot plug the law with retrospective effect. This is not done. Only two countries have done this China and India and India is the only country to apply it.

This IBM case is just the tip. This relates to transfer pricing and royalty payment. @sayareakd can shed some light on this.

 

[sayareakd]

lot happen, cant comment on it, lets keep it that way........

 

[Ray]

What taxes has the IBM defaulted?

 

[sob]

It has to do with the fact that part of the software or backoffice work is done in India while some IBM entity gets the full contract. The whole contract is split amongst the various units around the world. The main point that arises is how do you quantify the value of the work being done and the subsequent value addition. IMO the kaws are quite opaque and outdated to deal with this.

Sent from my GT-N7100 using Tapatalk

 

[sayareakd]

if work is done in India then it is taxable...............

 

[sob]

The problem is with the valuation. The govt. Feels that they are undervaluing it.

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[Eastman]

Last checked IBM's BPO sector got sold (at least in India), private sector winning a petition in India is not a new phenomenon and not impossible.