Aviva could face $11m penalty for alleged tax evasion in India

An Indian tax agency has discovered that British insurer Aviva violated local regulations capping commissions to sales agents by using fake invoices and clandestine cash payments between 2017 and 2023.

According to a tax notice issued in early August, Aviva’s India unit paid approximately $26 million to entities that falsely claimed to provide marketing and training services. These vendors were actually used to channel funds to Aviva’s agents without performing any real work.

The fake invoices were allegedly used by Aviva to claim tax credits and evade $5.2 million in taxes in India. Investigators said Aviva’s actions were aimed at gaining more business and market share.

The company could face up to $11 million in penalties, roughly equal to its 2023 profit from selling life insurance in India.

On August 31, 2024, Aviva stated that its India unit is actively engaging with local authorities over this matter.

This case is part of a larger investigation spanning 16 Indian insurers, which began in September 2023, concerning an alleged $610 million in unpaid taxes, interest, and penalties.

As part of this broader probe, India’s tax authority has also issued show-cause notices to Bajaj Allianz Life Insurance and ICICI Prudential Life Insurance for alleged tax evasion since 2017.

India’s Directorate General of Goods and Services Tax Intelligence (DGGI) is expected to send show-cause notices to additional insurance companies as well, according to sources, including a government official.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.