Aviva's Alleged $26M Commission Scheme Under Indian Tax Investigation

British insurer Aviva faces scrutiny from Indian tax authorities for allegedly breaching local commission regulations. The company is accused of using fake invoices and clandestine cash payments to channel funds to its agents. Aviva allegedly misappropriated $26 million between 2017 and 2023 to evade $5.2 million in taxes.

British insurer Aviva is under scrutiny from Indian tax authorities for allegedly breaching local regulations regarding commission payments to sales agents. According to a notice seen by Reuters, Aviva's India operations paid around $26 million to entities posing as marketing and training service providers between 2017 and 2023. These entities did no actual work, instead serving as fronts for channeling funds to Aviva's agents, the Directorate General of GST Intelligence reported.

Investigators claim Aviva indulged in a conspiracy using fake invoices to facilitate these transactions, allowing the company to claim incorrect tax credits and evade $5.2 million in taxes. The notice also states Aviva faces approximately $11 million in penalties. Senior management, including former India CEO Trevor Bull and CFO Sonali Athalye, are allegedly aware of these operations, with email evidence suggesting discussions on circumventing regulatory limits.

The revelations form part of a broader investigation into over a dozen Indian insurers for potential tax evasion totaling $610 million. Despite the allegations, a UK-based Aviva spokesperson declined to comment on ongoing legal matters, and the company's Indian operations remain silent. The Indian market, though small for Aviva, is seen as a growth opportunity with life insurance premiums equating to 3% of the national GDP.

(With inputs from agencies.)