Valerie Wagoner is founder and CEO of Zipdial. Zipdial is a toll-free phone marketing and customer service solution that leverages the fact that most Indians do not pay for incoming phone calls or text messages. It also uses the very Indian concept of a missed call to create new sources of revenue. You can read more about Zipdial and Valerie in this TechCrunch article.
Valerie is an interesting follow on Twitter for anyone who is interested in the startup and innovation scene in Bengaluru and Mumbai. She recently tweeted this
To foreigners in India: Income Tax change this year "Any Resident pays tax in India on his entire WORLD income, wherever accrued/received"
— Valerie R. Wagoner (@valwagoner) July 29, 2013
Intrigued by what this hassle was all about and to get a slightly more detailed take from Valerie herself on this topic, I reached out to her via Twitter and email. Thanks to Zipdial and Valerie for their prompt responses! Here below is our email exchange which will hopefully educate all on what the change in taxation rules for foreigners really means to foreigners and foreign companies in India. Please let me know if you have any other questions about this topic?
SHYAM: How much extra work did this tax law change create for Zipdial? Can
you quantify in terms of manpower and time?
VALERIE: ZipDial is an Indian company, so this law had no impact on the company, but it did have an impact on me personally as well as a couple other colleagues as we are foreign nationals living in India. So in our case, it’s more complicated filings on the personal front.
SHYAM: Does this law creative incentives for companies and foreigners to
earn their income in their home country or other Asian countries
rather than earn income in India?
VALERIE: Keep in mind that credits to avoid double-taxation still exist, so hopefully this doesn’t create a bigger tax burden, just more cumbersome paperwork. There are many factors affecting where people decide to live and therefore earn their income and taxes is just one of them. That said, changes like this certainly don’t make it any more attractive for people to make the kind of move I made to India nearly six years ago.
SHYAM: Why do you think this law came about now?
VALERIE: I do not want to speculate on behalf of the Regulator, but keep in mind that in addition to revenue reasons for tax law changes, in a country like India, there is also high consideration for security reasons. For example, every year as a foreigner living in India, I have to renew my police-verified Residential Permit which confirms who I am, where I live, and why I’m in the country. While it’s a painful annual process, it is driven by security reasons. Similarly, knowing how and where foreign nationals residing in India are making money could provide information for security purposes in addition to tax
SHYAM: I know Zipdial recently started operations in Sri Lanka. Does this
new tax law make you want to move more of your office space and human
VALERIE: There is no impact. We are an Indian company, based in India, and employing nearly all Indian citizens. For many reasons, we know that Singapore is a future destination for the company headquarters as we continue to expand into Asia, but that move would happen anyway for many other reasons, not because of this law change.
SHYAM: Thank you for the prompt response to my email questions. Really appreciate it.
VALERIE: no problem and happy to help!