#4月财经新势力 #
India really deserves to be a slaughterhouse for multinational companies, and millet has also fallen into the pit.
In January last year, the Indian government accused Xiaomi of tax evasion and issued a sky-high fine of 560 million yuan.
Then, in May, the Indian government froze Xiaomi India by 55.5 billion rupees, equivalent to 4.7 billion yuan, for violating local laws.
Recently, there was news that Xiaomi's appeal to the local court has been rejected, and the money has been completely confiscated by the Indian government.
Since entering the Indian market in 2014, Xiaomi has been crawling for nearly 10 years, and has not made a few bucks in total.
This time, all of them were deducted by the Indian government, which is equivalent to 10 years of white work, how to get a "miserable" word.
Millet has been dried for India for 10 years
As a federal country, India's laws are notoriously "joking", and the main thing is casual.
In May 2022, Indian law enforcement authorities accused Xiaomi of violating India's Foreign Exchange Regulations on the grounds that Xiaomi India sent money to Qualcomm in the name of royalties.
It stands to reason that Xiaomi India's money is legally and reasonably earned, and you can spend it as you want, and transfer it out if you want to, which should be fine.
But India seems that you said that this money is used to pay for Qualcomm's patent fees, so does Xiaomi India have a separate patent agreement with Qualcomm?
What the? No? Well, then you violated the Indian FEMA Act, which is stealing India's foreign exchange reserves, and also fictitious spending to evade taxes, I have the right to seize the money in your account.
4.7 billion yuan was seized, of course Xiaomi did not do it, immediately publicly stated that Xiaomi complied with local laws and regulations, there were no problems, and appealed.
However, a while ago, the Indian court rejected Xiaomi's appeal and announced that it was changed from "freezing" to "confiscation", and apparently the money could not be returned.
After nearly 10 years of operation, Xiaomi has built 7 factories in India, contributing more than 20,000 jobs.
And more importantly, Xiaomi uses China's powerful communication technology to drive the platform construction of India's overall Internet industry.
But even if Xiaomi is a "meritorious minister" who helped India's communications industry open up territory, it also encountered a "pig killing plate".
Xiaomi's nearly 10 years of operation in India, the profit is not necessarily 4.7 billion, this is likely to have to be reversed.
Speaking of which, some people may think, is it because of the problem of Sino-Indian relations, India is using millet to gas?
To tell the truth, it's really not, the Indian government really treats everyone equally in this regard, what Europe, the United States, Japan and South Korea, no matter who comes, they also have to change their suits and pants, making you want to cry without tears.
How outrageous is the "multinational slaughterhouse" India?
Indian State Minister Manmohan Singh has said:
As of July 27, 2022, 1,777 of the 5,068 registered multinational companies in India have chosen to "leave", and the remaining multinational companies that are still "holding their ground" have an active rate of only 30%.
Why can India become a "slaughterhouse" for multinational companies and deregulate global multinationals?
The answer is the tax code, and the "outrageous" encounter of British Vodafone in India may be able to illustrate the magic of the country of India.
Vodafone UK is a communications giant and the largest mobile phone operator in Europe.
In 2007, Vodafone acquired Li Ka-shing's CPG Investment Company, and since CPG held 67% of Hutchison India, Vodafone acquired Hutchison Whampoa's business in India in disguise and entered the Indian market.
But no one could have imagined that the Indian tax department would come to the door and say that although you are trading abroad, your assets are in India, so you must recover transfer income tax and have to pay additional fines, totaling 2.6 billion US dollars (about 18 billion yuan).
If you didn't earn a penny, you were fined 18 billion first?
How could Vodafone be the unjust leader, all the way to the Supreme Court of India, and after 5 years, finally won the case.
You think that's the end of it?
The more outrageous thing is just beginning.
Seeing that I lost the case, the Indian tax department exploded, and I can still let foreign companies bully me in my own home?
India's tax authorities amended the Income Tax Act at the speed of light, "tailoring" the new law for Vodafone.
The most striking thing is that this revised law breaks the international practice that the law cannot be retroactive, but specifically stipulates that it can be traced back 50 years.
Yes, it's very Indian.
As a result, Vodafone in the UK was defeated by the Indian tax department with a newly revised "legal weapon", and was sentenced to pay various fines, taxes, late fees, and doubled the interest from the original $2.6 billion to $5.1 billion, completely dumbfounded.
But Vodafone was still not convinced, and insisted on taking the case to the international arbitration court, ready to overturn the case for himself.
Over there, the Indian tax department found a new bug:
The new Income Tax Law can go back 50 years, so will all multinational companies that have "violated the law" in the past 50 years have to pay fines?
Everyone has a share, and no one can run.
In a very short period of time, the Indian tax department issued a sky-high fine of $13.5 billion against 17 multinational companies in Europe and the United States, and multinational companies around the world were blinded.
How still, the law can still play like this.
Won't you make me pay taxes in the future, change the law at will, go back 50 years, and I will obediently admit my head and pay the fine?
Fortunately, under the joint pressure of a number of multinational companies, countries such as Britain, France, Germany and the United States came forward to make India cancel the legal provisions going back 50 years.
But after this war, India's international reputation has been completely destroyed, and multinational companies have chosen to withdraw from India.
Written at the end:
When India decided to open its doors, Singapore's founding father, Lee Kuan Yew, predicted that India could become the next China.
But when recognizing the fundamental xenophobia of India's business environment, Lee Kuan Yew reassessed India:
"Open country, closed heart."
Whether it is Vodafone in the UK or Xiaomi in China, there is actually no essential difference for India, they are both "foreign enterprises".
There are only two ways for foreign companies to earn money in India, and if they do not spend all of them in India, they will be "punished".