Monday, 2024 February 26

ByteDance’s two bank accounts blocked in India over alleged tax evasion

Chinese internet giant ByteDance’s two bank accounts in India have been blocked by local authorities over alleged tax evasion while the company is appealing to overturn the decision, according to a Reuters report citing two sources with knowledge of the matter.

This comes two months after ByteDance slashed down its Indian workforce following the Indian government’s decision to retain the ban on its popular short video app TikTok. TikTok has been locked out of the country—its largest overseas market by downloads per stats by market researcher Sensor Tower—since June 2020 amidst the rising tensions with China over a border clash. Subsequently, ByteDance began to shift its focus to Singapore, in a bid to make the city-state its headquarter in Asia.

The departure of TikTok since last year has left a void in India’s short video sector, which has been quickly filled by local startups as well as global tech giants launching their own services in the market.

ByteDance’s two bank accounts with Citibank and HSBC were blocked in mid-March for “alleged evasion of certain taxes in online advertising dealings between the ByteDance unit in India and its parent entity in Singapore, TikTok Pte Ltd,” the two sources told Reuters. India also ordered these banks to not allow ByteDance India to withdraw funds from any other bank accounts linked to its tax identification number, the report added.

In a court filing, ByteDance has argued that the decision to block these accounts is an abuse of the law. Freezing the accounts, which have a total of USD 10 million, will make it hard for the company to pay salaries and taxes.

“At ByteDance, we are committed to abiding by local laws and regulations. While we disagree with the decision of the tax authority in this matter, we will extend our full cooperation to the government,” a ByteDance spokesperson told Reuters.

ByteDance currently has 1,300 employees in India, down 35% from January when it had over 2,000 people. Most of its workforce is engaged in overseas operations, including work on activities such as content moderation.

Moulishree Srivastava
Moulishree Srivastava
In-depth, analytical and explainer stories and interviews on technology, internet economy, investments, climate tech and sustainability. Coverage of business strategies, trends in startup and VC ecosystems and cross-border stories capturing the influence of SEA, China and Japan on the local startup industry.

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