Flipkart Parent Walmart Gets A Mammoth $1 Billion Tax Bill After Shifting PhonePe's HQ To India
Flipkart parent Walmart, along with other PhonePe shareholders, will have to pay nearly $1 billion in tax after the digital payments company shifted its headquarters to India last year. Walmart has confirmed that it has paid the Indian government most of the nearly $1 billion in taxes owed.
Flipkart parent Walmart, along with other PhonePe shareholders, will have to pay nearly $1 billion in tax after the digital payments company shifted its headquarters to India.
Why The $1 Billion Tax Bill?
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The $1 billion tax bill comes after the relocation and rise in value of PhonePe, which Walmart took majority ownership of after acquiring parent firm Flipkart.
Now separated from Flipkart and re-domiciled from Singapore to India, fintech firm PhonePe is raising funds at a $12 billion pre-money valuation from General Atlantic, Qatar Investment Authority, and others, triggering the hefty charge in the form of tax, people aware of the matter said, as per a Bloomberg report.
In another report by Reuters yesterday, Walmart confirmed that it has already paid the Indian government most of the nearly $1 billion in taxes owed. However, Walmart did not give any other details on the payment.
PhonePe¡¯s Shift To India
In October last year, PhonePe said that it had completed the process to move its base from Singapore to India.
The company has moved all businesses and subsidiaries of PhonePe Singapore directly to PhonePe Pvt Ltd. in India, including its insurance broking services and wealth broking businesses, it said in a statement.
¡°Following these actions, all PhonePe Group businesses and entities are now wholly owned by and consolidated under PhonePe Pvt Ltd - India,¡± it said.
PhonePe¡¯s Separation From Flipkart
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PhonePe, founded in late 2015 by former Flipkart executives Sameer Nigam, Rahul Chari, and Burzin Engineer, was bought by Flipkart in 2016.
Two years later, it became a part of Walmart after the US retail giant acquired Flipkart. Then, in 2019, Flipkart's board of directors gave PhonePe preliminary approval to be spun off as a separate entity.
As per an ET report, in June 2022, it was reported that the separation process was underway and that executives at PhonePe were looking to formally complete the procedure in a month or two.
And as per a Reuters report, Walmart said that last month it had completed the separation of PhonePe from Flipkart, adding that it would remain a majority stakeholder in both companies.
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