US-based global e-commerce platform Walmart and other PhonePe shareholders need to pay a $1 billion tax bill after shifting headquarters to India, Bloomberg reported.
Walmart got a majority shareholding in the Indian fintech firm after it acquired Flipkart, its parent company in 2016. The Indian e-commerce platform took over PhonePe in 2018.
Recently, Flipkart and PhonePe separated and the latter has re-domiciled in India. Multiple sources claimed that it is shifting to its new office in Bengaluru. The firm is also in talks with investors like General Atlantic and Qatar Investment Authority to raise funds at a $12 billion pre-money valuation.
Sources said that the tax amount originated due to the relocation and the rise in the valuation of PhonePe.
However, both PhonePe and Walmart did not comment on the development.
The shift of PhonePe from Singapore to India can be considered an 'unusual' event for an Indian tech start-up.
According to a report by India Briefing, since 2000, nearly 8,000 start-ups have moved their offices to Singapore. Multiple reasons can be traced behind this attitude. Firstly, Singapore offers a friendlier tax regime compared to India. Secondly, companies find it easy to get foreign investments in the country than in India.
However, PhonePe's move can be an indication of its plans for an Initial Public Offering ( IPO). The company may prepare itself for an Indian stock market listing.