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Nokia Corporation Message Board

  • inwestr inwestr Feb 12, 2013 4:44 AM Flag

    Nokia Files Letters of Complaint in India

    02/12/2013 01:28 *DJ Nokia Sent Letters of Objection in India Against Actions Taken by Tax Authorities
    02/12/2013 01:28 *DJ Nokia Seems Authorities Focus on Withholding Tax on Op Software Payments
    02/12/2013 01:28 *DJ Nokia Says In Full Compliance With Local Laws and India-Finland Tax Treaty
    02/12/2013 01:28 *DJ Nokia Believes Indian Actions Run Counter to Domestic Laws, Intl Standard
    02/12/2013 01:28 *DJ Nokia Files Letters of Complaint in India
    02/12/2013 01:28 *DJ Nokia Hasn't Received Any Official Iinfo on Potential Tax Claims

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    • This issue will hold the stock range bound until matter in question is settled, IMO.

      Sentiment: Hold

    • Wow, it was obvious to an outsider to me 3 weeks ago - Elop finally decided to do something now that Hedge funds had 3 weeks to cover.

    • Weak hands going to sell tomorrow.

    • New Delhi, Feb 12:

      Nokia on Tuesday filed letters of objection in India protesting against the actions taken by the Income-Tax authorities at Chennai on grounds that it ran counter to the domestic laws of India and international standards.

      “As a company with operations around the globe, Nokia believes the actions of the Income-Tax authorities in Chennai are excessive, unacceptable and inconsistent with the Indian standards of fair play and governance. Specifically, in tax investigations like this, local standards would prohibit Government officials from entering the factory premises and Nokia IT systems without valid authorisation and questioning the individual employees for intolerably long periods of time, even after they have fully cooperated with the authorities,’’ Nokia said in a statement.

      Tax claims

      Nokia said that it has not received any official information on the potential tax claims, and thus far has only seen wildly varying claims from anonymous officials via the media. “We do not see any merit in any of the claims, and are ready to defend ourselves vigorously,’’ the handset maker said. This is the first time that Nokia has come out in the open on the issue.

      Royalty payment

      The issue is that any royalty payment made against supply of software by the parent company attracts a 10 per cent tax deduction. This, the I-T Department said, Nokia India did not do since its plant went on stream in 2006.

      Nokia India has been downloading software from its parent company to make mobile phones in India, said a Department official on condition on anonymity.

      Tax deduction

      As per a Clarification Amendment of the Finance Act, 2012, any payment made by a company to a non-resident company has to be subject to a 10 per cent tax.

      For the last 5-6 years, Nokia had made payments to the extent of Rs 25,000 crore on which there is to be a tax deduction at source of 10 per cent (Rs 2,500 crore), which the company has not paid to the Department, the official claimed.

      Nokia said that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the Governments of India and Finland, as far as withholding tax on supply of operating software is concerned.

      Transfer pricing policy

      “Equally important, Nokia confirms that its position is that its transfer pricing policies are fully in accordance with the applicable legislation in India and Finland, including the bilateral tax treaty in force between the countries. It is important to note that since setting up the factory Nokia’s transfer pricing policy has been regularly scrutinised and validated by the Indian and Finnish tax authorities in the normal course of tax proceedings,’’ it said.

      Nokia arrived in India 17 years ago and has invested over $330 million in Chennai since setting up the factory in 2006, and now employs over 9,000 people.

      “Nokia reiterates that it operates with transparency in its business transactions, and re-emphasises its willingness to cooperate fully with the Indian tax authorities in accordance with all applicable laws when they share their claims directly with us. Nokia has enjoyed a long and fruitful relationship with India, and we look forward to a prompt and just resolution to this matter,’’ the company said.

      Nokia had filed the protest letters with the Deputy Director of Income-Tax (Investigation) – Unit I(1) Chennai; Additional Director of Income-Tax (Investigation) Chennai; Director of Income-Tax (Investigation), Chennai; and the Director General of Income-Tax (Investigation), Tamil Nadu.

      • 3 Replies to inwestr
      • Integrated corruption and spying? Who is behind of this - Google, Apple, Samsung ... ?

        Sentiment: Strong Buy

      • When you open a factory in the jungle you have to obey the laws of the jungle.lol

      • Nokia protests tax probe in Chennai, India as excessive

        HELSINKI | Tue Feb 12, 2013 4:49am EST

        Feb 12 (Reuters) - Finnish phone maker Nokia said on Tuesday it was protesting against a tax investigation by authorities in Chennai, India, calling the probe that began in January excessive and unacceptable.

        Nokia said it has not yet received any information on potential tax claims, but said it sent letters objecting to the authorities' actions including entering its factory premises.

        "As a company with operations around the globe, Nokia believes the actions of the Income Tax authorities in Chennai are excessive, unacceptable and inconsistent with Indian standards of fair play and governance," Nokia said in a statement.

 
NOK
8.17+0.08(+0.99%)Dec 26 4:01 PMEST

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