Nokia Takeover In Jeopardy Due To Alleged $3.4B Tax Bill In India 226
New submitter Snotboble_ writes "The government of India apparently thinks Nokia owes a lot of taxes. They originally told Nokia that the company owed around $340 million, but now reports suggest it could be an order of magnitude higher. Such a large liability would have consequences for Nokia's sale of its handset division to Microsoft. From the article: 'Nokia Corp.'s tax troubles in India worsened Tuesday as local authorities ratcheted up the amount of tax they say the Finnish company may owe to more than $3 billion. Nokia's battle to defend itself from the claims—one of the latest surprise tax bills slapped on big foreign companies in India—could affect its plans to sell its handset division to Microsoft Corp. as the phone company's factory in India is part of the $7 billion deal.'"
Announce shutdown of factory ... (Score:0, Informative)
OK. If the new tax bill is 3B instead of 0.3B announce the closure of the factor and the layoff of its workers. This works in most other places around the world.
Re:corruption (Score:5, Informative)
Having worked for a company a decade ago, where the Indian government tried to blackmail them for "back taxes" I'm going to hazard out on a line that it's probably not on Nokia's end.
Perhaps Tata wants to acquire Nokia (Score:2, Informative)
Sounds like India wants to kill the sale of the handset division to Microsoft, driving Nokia stock even lower, then conveniently an India company will buy Nokia out. Sound Like India politics at its finest
Knowing India as I do, I will not be surprised at all if Tata emerges as the "Knight in the shining armor" rescuing Nokia from the grab of the "dirty Microsoft".
Re:"Shakedown" looks very promising (Score:0, Informative)
If the rest of the American companies can deal with the Indian Government - and have done so for decades (Msft, IBM, Oracle, Cisco, Fidelity, GM, Ford... and remember, every one of those firm also have to abide by US laws.
Then it is not the Government that you need to finger. It your company's incompetence - your planning was probably fcked up!
Re:You are not a racist, you are ignorant... (Score:3, Informative)
What if I say every adult Finn is a closet xenophobe? Will you agree to this generalization? .
That's pretty spot-on, yes. But most do try to lie about it.
Taxes are a bit of a taboo subject in Finland, and tax evaders are morally ranked somewhere between murderers and rapists. I'm looking forward to the public lynching of these people.
(discloser, I'm an adult Finn, and try to lie about my xenophobia to be polite)
Re:Shades of the Vodafone case (Score:5, Informative)
by your links it is not the same at all. The Vodafone case had the government contending that even though the sale occurred between 2 foreign entities. the asset was Indian therefore liable to tax in India. The Government lost the case but changed the law retroactively to apply for all transactions including the vodafone one. While this is bad for business it is legally sound. Every government makes laws that apply retroactively including the U.S. government.
In the Nokia case, the company routed all the profits out of India as "royalty payments" and did not pay tax on them over a period of seven years. In addition they are claiming Tax free status (due to their being part of Special Economic Zone) that claim is also not valid.
Not all $3.4B is tax, significant portion of it is penalties for offending over 7 years. Basically they tried legal trickery to maintain their cash flows when things are going bad business wise and now trying to dump it on MSFT.
Indian Government is actually doing good here, if they allow the sale to go forward then MSFT becomes liable, Like it happened in the vodafone case, instead they are ensuring NOK clears the dues, so MSFT is not in for any nasty surprises.