These days, Lei Jun should have a headache...
Now, Xiaomi ate a $88 million (about 560 million yuan) tax bill from India's Ministry of Finance
The reason why I got this bill is because the Indian tax authorities believe that Xiaomi has evaded taxes.
Xiaomi India will remit royalties and licensing fees to enterprises such as Qualcomm, but these fees are not included in the transaction value of Xiaomi India's imported goods and are taxed.
As a result, Xiaomi India was required to pay the relevant taxes from January 1, 2017 to March 6, 2020.
At present, Xiaomi responds that whether royalties should be included in the price of imported goods is a problem in various countries, and it will actively communicate with the relevant departments in India.
Xiaomi is actually just the beginning.
If you look up the news further, you will find that as early as December 23 last year, the Indian tax department conducted a wave of raids.
Not only Xiaomi, but also many Chinese companies such as OPPO, OnePlus and Foxconn are on the list.
There is a high probability that Xiaomi will not be alone...
Looking further ahead, you'll find that in August last year, India raided ZTE's office in India on suspicion of tax evasion.
During that time, Ma Yun was also summoned by the Indian court because of the UC browser.
On the night that the Indian tax department raided Xiaomi and other Chinese companies in India, the spokesperson of the Chinese Embassy in India responded to the incident.
After reading the above news, you should be able to understand why, talking about the surprise tax inspection, our spokesperson finally turned to the Sino-Indian economy and trade.
It was pointed out that India should provide an open, fair and non-discriminatory business environment for market players, including Chinese enterprises.
Click to view the larger image▼
From manufacturing to the Internet, in the past two years, India's successive "bans" and "tax inspections" are not squeezing Out Chinese enterprises, you taste, you taste...
Unforeseen tax bills and uncertain regulation are, in a sense, the traditional arts of India.
Take the tax bill, don't look at the various tax bills of Chinese enterprises, as early as ten years ago, European and American companies also suffered from it.
In 2008, Microsoft was required by the Indian tax authorities to pay Rs 700 crore taxes.
Nokia was taxed $360 million in India in 2013.
Among them, the tax evasion identified by the Indian tax authorities, including the software licensing fee paid by Nokia India to nokia's parent company, is taxed at a rate of 10% on this income.
Nokia firmly believes that it has not evaded taxes, and believes that the Indian tax authorities are very "ridiculous".
This allowed Nokia to successfully receive a $414 million tax bill from the Indian authorities in 2014...
That same year, Samsung also received $207 million in tax bills.
If India really checks taxes according to local regulations, it seems that there is nothing wrong with it, right?
Here Shi chao has to tell you about 2007.
In 2007, Vodafone acquired an equity stake in Hutchison Whampoa's India mobile communications business (now part of Cheung Kong Hutchison).
Since the transaction was established between two non-Indian businesses, it stands to reason that there is no need to pay taxes to the Indian government.
In fact, in January 2012, the Supreme Court of India ruled that the acquisition was not subject to tax in India.
The Supreme Court has ruled, it's all right!?
Don't worry, the riot operation is coming...
In May of the same year, the Indian Parliament amended India's income tax law retroactively, in an attempt to overturn the Supreme Court decision and add another tax.
What is even more "magical" is that until 2017, when ten years have passed since the transaction, Yangtze River Hutchison can still receive a TAX bill of 40 billion Hong Kong dollars from the Indian government.
Screenshot of the long and announcement▼
At this time, Yangtze River Hutchison had no business in India...
The unpredictability and uncertainty of the Indian government behind the Vodafone tax incident have made multinational companies more or less aware of the Indian government.
Around 2011, a considerable number of multinational companies that came to India for India's demographic dividend ran away from India.
Multinational companies divested $3.1 billion in 2009.
Divestments in 2010 were $7.2 billion.
In 2011, divestments reached $10.7 billion.
Now, perhaps, it's just another round of history.
India has been looking forward to replacing "Make in China" with "Make in India".
After the outbreak of the new crown pneumonia epidemic, India once wanted to take advantage of the international concern about the risk of supply disruption in China's supply chain, and take the opportunity to replace China as an indispensable link in the global industrial chain.
Unfortunately, it is its own that cannot resist the epidemic...
Now, under the existential challenges brought about by the epidemic expenditure, he is doing things with his own uncertain supervision and unpredictable tax bills.
But, with these two tricks alone, can you go to the stubble of a multinational company with a magnifying glass to achieve the goal of "Make in India"?
Or is it just watching a lot of capital flow out and local labor opportunities diminishing?
Author: Yalang Editor: Polygon Line
Some of the pictures and sources:
Stephen's Sausage Roll
Weibo: Caijing Network;
reuters.com Analysis: India's Policy Deadlock Has Pulled Foreign Companies Out
Global Times, Sohu Technology, Sina Finance, Phoenix Technology
in.china-embassy.org/chn/sgxw/202112/t20211223 _ 10474984.htm