Finland Talks to India on Nokia’s $370 mn Tax Dispute

Nokia-logo-psd43421The government of Finland is trying to negotiate a settlement between Indian tax authorities and Nokia on a Rs 2000 crore tax dispute, according to reports.

“The Government of Finland has filed an application with the Indian government to consider and settle the Rs 2,000 crore Nokia tax case under the Mutual Agreement Procedure (MAP)… We will take decision soon,” the press trust of India quoted a senior finance ministry official as saying.

Nokia confirmed that the Finnish government has invoked the Double Taxation Avoidance Treaty between India and Finland but declined to comment further.

Last month, tax authorities had asked Nokia to pay Rs 2,000 cr (~$370 mn) in taxes and penalties. Tax authorities raided Nokia’s premises earlier for suspected tax evasion to the tune of more than half a billion dollars.

With over over 20% market share in the first half of 2012, Nokia is the largest handset seller in the country but has been losing share to competition.

Tax Authorities & MNCs in India

Indian tax authorities have been turning up the heat on Multi National Companies (MNCs) operating in the country. Earlier, search giant Google was fined $14.5 million for alleged tax evasion. The Income Tax department also fought hard against telecom player Vodafone and has asked them to pay more than $14,000 crore as tax and interest on the acquisition of Hutchison Essar by the UK based company for $11 billion.

Microsoft, General Electric and many other multi national companies have pending tax disputes in various courts of the country.

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