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IBM Challenges Indian Tax Allegations

by Mary Swire, Tax-News.com, Hong Kong

10 December 2013


IBM has begun a legal challenge against claims that its Indian unit under-reported its income for the 2008-09 financial year.

Last month, the Indian Income Tax Department demanded that the technology group settle a INR53.57bn (USD876.82m) bill in back taxes. IBM said at the time that it would "aggressively defend itself through the appropriate judicial process."

It is understood that IBM has now approached India's Dispute Resolution Panel. The complaint centers on a decision made by Department's Assessing Officer to recalculate IBM's taxable income, increasing the total by INR110bn.

The Panel has also recently been instructed to deal with a petition filed by telecoms company Vodafone against a Transfer Pricing Order. The Department alleges that Vodafone undervalued the shares transferred between its Indian and Mauritian arms in 2007-08 by as much as INR13bn. The Bombay High Court rejected Vodafone's petition, on the grounds that the transfer pricing authorities did have the right to investigate the supposedly unreported cross-border transaction.

TAGS: compliance | tax | business | tax compliance | India | tax avoidance | revenue guidance | tax authority | multinationals | tax planning | transfer pricing | revenue statistics | telecoms | Tax | Tax Evasion

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