Chinese Smartphone Vivo Accused of US$13 Billion Tax Evasion and Visa Violations in India
Updated: Jan 8
Indian authorities have accused Chinese smartphone giant Vivo of visa violations and tax evasion, alleging that the company covertly siphoned off approximately US$13 billion to the mainland.
The Enforcement Directorate of India claims that Vivo remitted this massive amount outside the country to trading firms controlled by its Chinese parent company in order to evade paying local taxes.
According to a court filing that is not public, at least 30 Chinese individuals entered India on business visas, but failed to disclose that they were employed by Vivo. The filing also states that Vivo employees breached rules by visiting the "sensitive" region of Jammu and Kashmir. These accusations come amidst rising tensions between India and China over business activities, following border clashes in 2020.
The Enforcement Directorate's investigation into money laundering led to the arrest of Guangwen Kuang, a Vivo executive. The filing reveals that numerous Chinese nationals traveled across India, including sensitive areas, in violation of Indian visa conditions. Many employees of Vivo group companies worked in India without appropriate visas and concealed information about their employer in their visa applications.
Vivo, which holds a 17% market share in India, the world's second-largest smartphone market, expressed concern over the executive's arrest and emphasized its commitment to legal compliance. The Chinese foreign ministry has been closely following the case but has not provided any comment. The Indian embassy in Beijing and the foreign ministry in New Delhi have also remained silent.
Last year, the Enforcement Directorate conducted raids on 48 sites linked to Vivo and its associates as part of the money laundering investigation. The agency accused the company of illegally siphoning money to China to evade Indian taxes through indirectly controlled companies. The recent court filing reveals that Vivo remitted a staggering 1.07 trillion rupees (US$13 billion) outside India to trading companies controlled by its Chinese parent, disguising the transactions to avoid government detection.
While Vivo showed no profits in its statutory filings from 2014-15 to 2019-20 and paid no income taxes, the Enforcement Directorate discovered that significant sums were siphoned off out of India. In a previous estimate, the agency had identified 624.7 billion rupees that were remitted mainly to China.
Vivo, a Chinese smartphone giant, is accused of visa violations and tax evasion in India
At least 30 Chinese individuals entered India on business visas without disclosing their employment with Vivo
Vivo is alleged to have remitted approximately US$13 billion to China to evade taxes in India