Nokia Faces 34 Billion Tax Claim in India

Nokia Faces $3.4 Billion Tax Claim in India

Indian tax authorities froze some of Nokia's assets in October, including its bank accounts and buildings, over a dispute that has forced Nokia to approach the Indian courts seeking relief.

MUMBAI -- Finnish mobile phone maker Nokia faces a tax bill of more than 210 billion rupees ($3.4 billion) in India from liabilities arising out of unpaid charges and penalties since 2006, a report said today.

Indian tax authorities froze some of Nokia's assets in October, including its bank accounts and buildings, over a dispute that has forced Nokia to approach the Indian courts seeking relief.

Nokia (IW 1000/109) has reportedly offered to pay about 30 billion rupees ($490 million), but the income tax department "has informed the Delhi High Court that Nokia India and its parent Nokia Corp have a tax liability adding up to 211.53 billion rupees," the Times of India reported.

The paper said the submission was made by the income tax department in its reply to Nokia's plea for the unfreezing of its assets in India.

Nokia's Indian unit was not immediately available for comment on the report.

The case is due to be heard in court on today.

Nokia, which has one of its biggest plants worldwide in the southern Indian city of Chennai, is among a string of multinationals that face tax problems in India, including Cadbury, Royal Dutch Shell (IW 1000/1) and Vodafone.

The alleged tax evasion involves software royalty payments to Nokia's parent, on which 10% tax should have been deducted and paid to Indian authorities, the income tax department claims.

Nokia hopes that its Chennai manufacturing plant could be unfrozen ahead of its sale to Microsoft (IW 500/16).

Microsoft agreed in September to acquire Nokia's devices and services business for $7.2 billion, with the Chennai factory part of the deal.

The plant employs about 8,000 people and includes productions lines, maintenance assembly and testing operations.

Copyright Agence France-Presse 2013

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