The Nokia tax dispute in India seems to be inching closer to a settlement with the phone-maker left with little choice but to cough up taxes demanded by the Income Tax department.
Finnish phone maker Nokia has said that it is willing to pay the Indian government Rs 2,250 cr (~$360 mn) in taxes as soon as it completes its sale to Microsoft in a $7.2 bn deal which was announced earlier.
The Income Tax department, which has been persistent with its demands, said that the company owes nearly $1 bn in taxes to the government.
Nokia was seeking the Delhi High Court’s permission to lift a stay on transfer of its Indian assets to Microsoft under the sale, financial daily The Hindu Business Line reported. The court, hearing the alleged tax evasion case, had issued a stay order on the transfer.
The Tax department has been asked to respond by the month end. Nokia said:
“Immediately after sale, irrespective of the sale price, we will deposit Rs.2,250 crore. If the sale price is much higher, we will deposit the entire surplus after adjusting outstanding liabilities, excluding income tax liabilities.” (Source)
The Nokia Tax Dispute in India
Tax authorities dismissed Nokia’s appeals in June against a tax demand of over $350 mn in June. After this, the handset maker appealed to the Delhi High Court against the tax demands. Nokia’s India unit was served in March with a tax demand for five years starting from 2006/07.
The Income Tax department had raided the company’s premises in Chennai for a suspected tax evasion to the tune of more than half a billion dollars earlier this year. The company threatened to shut its Indian plant, which employs nearly 8000 people.