The Indian Income Tax (IT) department has rejected Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s offer to pay a minimum of Rs 2,250 crore ($361 million) in tax liabilities. Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Indian unit has Rs 6,500 crore ($1.04 billion) in tax liabilities, according to the IT department. However, the company refused to change its offer, saying that it’s up to the department whether to accept or reject it.
Nokia to provide its financial details on December 9th
The Delhi High Court judges Sanjiv Khanna and Sanjeev Sachdeva said that the Finnish mobile maker is “offering nothing.” In response, the Finnish company’s attorney Harish Salve said that the company was not in a position to pay more. And whether it can pay a greater sum will depend on its acquisition by Microsoft Corporation (NASDAQ:MSFT). Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Indian arm has been accused of evading more than $1 billion in taxes. The company offering to pay a partial amount indicates that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) accepts its guilt, which may weaken the case of the Finnish company.
An Indian court had placed a stay order on the transfer of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s assets in India. The company recently sought lifting of the stay, arguing that the court injunction could imperil the sale of its Indian business to Microsoft Corporation (NASDAQ:MSFT). On December 9, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) will provide details to the court about its assets, liabilities and past tax payments in India, according to Press Trust of India.
Court questions Nokia’s intention
The bench of justices Sanjiv Khanna and Sanjeev Sachdeva also questioned the company’s intention behind transferring Rs 3,500 crore ($562 million) to its parent company as past 18 years of dividend. The bench’s suspicion came after Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) announced that that it was exiting the mobile phone business, irrespective of the sale of its Indian plant. Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) had Rs 4,100 crore ($658 million) in cash in India that the company repatriated recently.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) said that the IT department is wrong if they believe that they would be better off by auctioning the assets off. That’s because, added the Finnish company, its Indian assets have real value in use, not in the sale, and Microsoft Corporation (NASDAQ:MSFT) is the only company that can use it. Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has earlier stated that it wants to sell its Indian assets as part of its deal with Microsoft Corporation (NASDAQ:MSFT). The Seattle-based company has expressed interest in the company’s assets in the country if relevant approvals are obtained from authorities.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares tanked 0.82% to $7.99 at 1:34 PM EST.
