New Delhi, April 21, 2018

Half-a-decade old tax dispute between Nokia and the Income Tax department has finally been settled under a mutual agreement procedure (MAP) system, confirmed the I-T department on Friday.

The development clears way for sale of the Finnish telecom giant’s closed manufacturing plant in Chennai.

“Dealings between India and Finland have been completed under MAP and the issue has been resolved. It appears that Nokia has agreed to make a provisional tax payment and pay `1,600 crore tax demand made by the I-T,” a senior official in the department told TNIE.

Nokia India was issued a demand notice for `2,500 crore in 2013 over ‘royalty payment’ issues, which after rectification came down to `1,600 crore. The I-T also raised a tax demand of `10,000 crore tax on Nokia Corporation for the same transaction, which is now dropped under the MAP agreement.

Nokia’s assets in India, including its Chennai plant had been frozen over the unresolved tax case.  The Chennai plant — once the world’s largest mobile phone manufacturing plant,    was shut in 2014, leaving as many as 15,000 people unemployed. The company had earlier expressed desire to sell the plant, which is at present, is valued at `350-400 crore.

[The New Indian Express]