Nokia invokes India-Finland bilateral treaty to solve tax row

Tags: News
With tax authorities pressing with over Rs 21,000 crore in unpaid dues, Finnish telecom major Nokia has invoked the Bilateral Investment Promotion and Protection Agreement (BIPA) India has with Finland to resolve the dispute.

Nokia late last month wrote to Prime Minister invoking dispute settlement clause in the India-Finland BIPA to settle the row that had led to its Chennai plant being left out of the over USD 7.2-billion deal with Microsoft.

The treaty provides for amicable conciliation proceedings and arbitration under local and the United Nations Commission on International Trade Law (UNCITRAL).

"Nokia is keen to work with authorities in India to resolve the tax disputes. As one of our actions, Nokia has sent a letter under Finland India Bilateral Investment Treaty (BIT) to the Prime Minister of India. The letter seeks for amicable resolution of the current tax disputes," a Nokia spokesperson told PTI.

Nokia, which last month completed sale of its handset business to Microsoft for over USD 7.2 billion, could not sell its Chennai manufacturing plant to the software giant as it is embroiled in the tax dispute with the Income Tax Department and the Tamil Nadu Government.

The company had approached the Prime Minister's Office (PMO) last month with the request.

However, BIPA clauses state that if a dispute between the country and the investor cannot be settled amicably within 3 months, the investor can approach local courts or seek international conciliation under UNCITRAL Conciliation Rules for its resolution.

The party can also approach the International Centre for Settlement of Investment Disputes or approach an adhoc arbitral tribunal under the Arbitration Rules of UNCITRA.

On the status of request made by the Finnish government last year to consider resolving the tax row under mutual agreement procedure, Nokia said: "Both the governments started the mutual agreement process (MAP) with an aim to resolve double taxation as per the provisions of India - Finland double tax treaty and negotiations are still on."

The application for negotiated settlement of the tax dispute was filed under the Double Taxation Avoidance Agreement (DTAA) between India and Finland.

EDITORIAL OF THE DAY

  • Public musn’t pay for domestic servants for our diplomats

    Nothing seems to have changed in the year and half since the fur that flew thick and fast over the case of diplomat Debjani Khobragade and her maid Sa

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Urs Schoettli

Economic integration in east Asia

As trade agreements within a global framework have become increasingly ...

Rajgopal Nidamboor

Up the ante of your conscious existence

It sounds cryptic, but is not as complex as it ...

Gautam Gupta

The ‘fake’ issue needs to be taken seriously

E-commerce players are witnessing unbelievable growth globally. Competition is increasing ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture