We have no issues if Murthy says he paid no taxes. But we have issues if he tries to pull wool over intelligent people of Karnataka.
Murthy on a recent clarification said that his company paid taxes and that is the statement we feel is very misleading.
We have started an investigation into tax malpractices of Murthy Angadi
As part of this we came across this interesting dialog between California State Senator Joseph Dunn and INFY head honcho Nandan, that was reported in the media in 2004.
Please find the excerpt below
On Mar. 5, California State Senator Joseph Dunn greeted an application for a tax exemption by Infosys Technologies Ltd., India’s premier software-services company, with an accusation that such companies ‘want to steal jobs’ and ‘taxpayer dollars.”‘ We would like to clarify for your readers:
Infosys pays taxes in all jurisdictions where it operates, based on domestic regulations and also using internationally recognized practices. Infosys has filed income-tax returns and paid income taxes in the state of California as per regulations laid out in the domestic tax regulations. Infosys is not requesting any tax exemption or incentives but has requested an alternative filing methodology that is permitted by the laws and regulations of the state of California. Our position to the specific case of Separate Accounting under California Revenue & Tax Code section 25137 has been mentioned in the filings with the Franchise Tax Board.
We would be grateful if you could publish this clarification, as otherwise it would give an impression that Infosys is unjustly seeking tax relief.
Nandan M. Nilekani
When California state government rejected the INFYs argument that it can not be taxed in US because it was an Indian entity and pays tax in India (It is another trick. Instead of saying that you did not pay.. You say you pay and then if someone seeks further clarification come up with explanation I pay zero tax– Wow. Indian invented zero and INFY seems to be internalized this )
Later that year INFY CEO admitted to media that they indeed had to pay tax in California but the amount is meager.
“Either way, we will bear minimum impact as the tax amounts to US$1 million against a revenue of US$1 billion and it is not a federal tax, but a state tax,”
Krish Gopalkrisnan, COO and deputy MD of INFOSYS
on record in media in 2004 after California State Tax Fiasco
How come a small sum of 1 mil USD became 70 mil USD? When INFY has accepted in the Annual report this year that 96% of its revenues in India are not taxable because they have a tax holiday till 2009. ( and SEZ scheme will further this period beyond 2015 )
Another interesting observation.
After that INFY actually makes a loss in US. ( See Infosys consulting’s balance sheet ). Now they make losses in US they need not pay even those peanuts.
But when it comes to printing annual report , strangely INFOSYS reports paying international taxes.
If we can get the IRS report on how much tax was paid this year, murthy may be forced to sing National Anthem forever. ( Like Bajaj did a la swadeshi)
Now I have request for the readers of this blog.
Request for those who are in India:
If you feel that I am raising right issue please forward this blog to as many friends as you would want. I want more views from the page to convince my american friends to file an IRS public record access under freedom of information act. I heard that fees can be around 50 USDs which is a small change for my american desis. But all that they ask me is “Ningobannige Yako E Tarle”.
And, Request for those who are in the USA.
After the INFY california tax fiasco , INFY consulting in USA officially finishes it balance sheets in the red.!!! So next time when another INFY marketing manager talks about value being delivered ask them to get some of those values into Infosys Consulting. Tell them you do not trust a loss maker to teach US business how to make more profits!!. Please forward this blog to vendor management team at your organization so that INFY might be asked this question.