India, Finland officials discuss Nokia tax case

Tags: News
Indian and Finnish finance ministry officials today discussed Nokia's Rs 21,153 crore tax dispute case and reviewed the double taxation avoidance agreement.

"Finnish finance ministry officials met Indian finance ministry officials on Nokia case today. The meeting was inconclusive, both sides presented their views. Both sides also reviewed India-Finland DTAA," a senior finance ministry official said.

Nokia and the Indian Income Tax department are fighting out a tax dispute case in Delhi High Court. While Nokia has offered to pay a minimum deposit of Rs 2,250 crore, out of the total tax liability of nearly Rs 21,153 crore, the I-T department has told the Court that the offer is not acceptable.

Nokia had moved the Delhi High Court seeking lifting of a stay on transfer of its assets here and offered to pay a minimum deposit of Rs 2,250 crore as tax, contending that the injunction will jeopardise the sale of its Indian arm to US- based tech giant Microsoft under a global deal.

In September, Microsoft Corporation and Nokia Corporation announced that their boards have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia's Devices & Services business, license Nokia's patents, and license and use Nokia's mapping services.

Yesterday, the Income Tax department has informed the Delhi High Court that Nokia India and Nokia Corporation owe it Rs 21,153 crore as total tax liability (existing and anticipated), including penalty during a seven-year period from 2006-2013.

The amount payable by Nokia has been arrived at by the I-T department on the basis that the mobile manufacturing firm does not discharge its TDS liability on royalty payments and is not entitled to any deduction under tax laws for operating from a special economic zone (SEZ).

The submission has been made by the I-T department in its reply to Nokia's plea for unfreezing of its assets in India prior to its USD 7.2 billion deal with Microsoft.

Nokia's Chennai plant is one of its biggest facilities. It may be excluded from the USD 7.2 billion agreement between Nokia and Microsoft if the company's assets are not released by December 12.

Finland's Foreign Minister Erkki Tuomioja had recently said that failure to resolve Nokia tax case before December 12 could lead to closing down of the Chennai plant, which directly and indirectly employs 30,000 people in India.

The I-T Department had slapped a notice on Nokia's Indian subsidiary for violating withholding tax norms since 2006 while making royalty payments to its parent company in Finland.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • 49 per cent FDI in defence should pave the way for modernisation

    There is one industrial sector in India that has been kept out of the purview of the normal cycle of investment and production — defence.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Necessary yet inadequate boost to education

The finance minister, in the very first minutes of his ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture