India’s authorities are threatening Nokia with a tax bill of around $1.1 billion – three times as much as the Finnish supplier was previously willing to pay to settle a dispute – according to a Financial Times (FT) report.
Nokia’s Chennai factory, one of the company’s biggest phone-making plants, was seized by the country’s authorities in September – around the same time as news broke that the Finnish company agreed the sale of its Devices & Services unit to Microsoft.
The drastic action was taken against the backdrop of an investigation by India’s revenue department into a INR23 billion ($375 million) claim related to payments made by Nokia’s Indian subsidiary to its parent company in Finland.
Nokia is reported to have offered at least €355 million to India’s tax authorities to settle the dispute, enabling the asset transfer to Microsoft.
However, “two people familiar with the situation”, according to the FT, confirmed that India’s revenue department now expects to raise a further tax claim of INR45 billion.
The sum relates to alleged non-payment of similar taxes on international transfers to its parent (which stretch over a longer period of time than when the INR23 billion fee was calculated).
An Indian court will announce on 12 December its verdict on Nokia’s appeal against the seizure of the Chennai factory, according to Reuters.