Concerning tax evasion, India froze the bank operations of ByteDance, a multinational internet technology company headquartered in Beijing and legally domiciled in the Cayman Islands. It was founded by Zhang Yiming in 2012. ByteDance is the developer of the video-sharing social networking services and apps TikTok and Douyin, the Chinese-specific counterpart to TikTok.
Indian authorities have recently banned two bank accounts of ByteDance for tax evasion. The move has impacted the company immensely as not only it has hampered its current operations, the company is still coping with the ban of TikTok and Helo in India, which are ByteDance’s biggest social media platforms.
The banks, Citibank and HSBC held ByteDance’s two bank accounts which were frozen on orders from the authorities, due to evasion of certain taxes in online advertising dealings between ByteDance subsidiary in India and its parent unit in Singapore, TikTok Pte Ltd. These two banks were directed to prevent Bytedance India from withdrawing their funds from any other accounts linked to their tax identification number.
The ban on the short video platform TikTok among other Chinese-based apps since last year in India has hurt the company’s fortunes in India. While before the ban ByteDance was a major recruiter in the technology industry, the ban prompted ByteDance to cut its workforce in India.
ByteDance, which used to have 1,300 employees in India before the ban, argued through a court filing that while it had only about $10 Mn in its accounts, the freezing of accounts will make it hard for it to pay salaries and taxes. The case is due to be heard in the Bombay high court this week.
This directive to freeze ByteDance India’s bank accounts came after tax authorities scrutinized documents and raised questions about some executives concerning the advertising and other transactions with its parent entity, last year.
Responding to the development, ByteDance said that it will extend its full cooperation to the government. “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,” ByteDance spokesperson said.
But India is not the only place where TikTok has faced its problems. It has faced scrutiny in the US and Europe as well. Former US President Donald Trump had alleged that the app posed security concerns as the personal data of the citizens of the US can be easily available to the Chinese Government. Though TikTok has stated that it does not share any data with the Chinese government, it is still the primary fear in the US and India.