Summary:
- The Indian Income Tax (IT) Department conducted searches at Truecaller’s offices in Bengaluru, Mumbai, and Gurugram on November 7, 2024, investigating potential tax evasion.
- The focus is on Truecaller’s transfer pricing practices, examining if the company has met compliance standards.
- Truecaller has confirmed the searches and assured full cooperation with authorities.
What Prompted the Raids?
The IT Department launched these searches to gather data and examine documents related to Truecaller’s financial practices, particularly in connection with transfer pricing. This area often scrutinizes transactions between a company’s local and international divisions to ensure fair taxation. The investigation aims to verify if Truecaller’s practices align with Indian tax laws and regulations.
Truecaller’s Response
In its official statement, Truecaller acknowledged the raids, stating that the visits were unexpected but noted its willingness to work with authorities. The company affirmed that it undergoes routine audits and clarified that it has consistently met tax obligations in India and internationally. Truecaller emphasized that its transfer pricing policy aligns with internationally accepted standards and undergoes regular independent reviews to satisfy both Swedish and Indian tax regulations.
Leadership Transition at Truecaller
The raids coincided with Truecaller’s recent leadership change. Rishit Jhunjhunwala, head of products and managing director for Truecaller India, was named CEO just a day prior, set to officially assume his role in January 2025. Current CEO Alan Mamedi and co-founder Nami Zarringhalam will step down from operational roles by mid-2025.
Implications and Next Steps
As Truecaller cooperates with the investigation, authorities are expected to delve deeper into its financial records. The outcome may set a precedent, highlighting how international companies handle tax compliance in India, especially concerning intra-group transactions.
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