Volkswagen’s Indian unit receives $1.4 billion tax evasion notice

Reuters reports that India allegedly evaded $1.4 billion in taxes from German automaker Volkswagen by “deliberately” paying less import duty on parts for Audi, Volkswagen and Skoda cars. It was first reported that a notice had been issued. Volkswagen shares fell as much as 2.13% on the Frankfurt Stock Exchange following the Reuters report.

why is it important

News of potential liability, which could amount to up to $2.8 billion including fines, could strain VW’s India operations. Although the company is small in India, it plans to invest $1.8 billion to manufacture EVs and hybrids in the state of Maharashtra. The Wolfsburg-based automaker is also in an escalating dispute with German workers over factory closures and layoffs as Chinese competitors attack established European automakers in their home turf.