Top global banks in India tax row
New Delhi, April 27, 2013
India said 27 companies, including the local units of HSBC, Standard Chartered and Vodafone, underpaid taxes in the last fiscal year after they sold shares to their overseas arms too cheaply.
Finance Minister P Chidambaram named the companies in a written reply yesterday to a legislator's question about which companies were in conflict with the tax department over transfer pricing issues.
Transfer pricing, or the value at which companies trade products, services, shares or assets between units across borders, is a regular part of doing business for a multinational company and influences tax liabilities.
The issue has been high on the political agenda in India and the country has stepped-up enforcement of tax collections and actions against global companies as it aims to make up for a revenue shortfall and head off a credit rating downgrade.
India's tax department also made "transfer pricing adjustments" involving the local unit of Royal Dutch Shell, the finance minister said.-Reuters