Companies like IBM, Vodafone, BMW, Royal Dutch Shell, and Nokia are currently fighting unpaid tax claims in India’s court system. Out of all the companies, Nokia’s tax woes recently took a turn for the worse. Indian tax authorities believe that Nokia’s tax bill should be $3.4 billion, which is quite an increase from the previously stated figure of $340 million.
Tuesday, Indian tax authorities claimed that the amount of money Nokia needs to pay in back taxes could reach $3.4 billion. Why does Nokia need to pay hefty fines in India? Local tax authorities claim that Nokia owes the money after erroneously claiming tax exemptions on software exports. What’s the big deal? (besides potentially owing the Indian government somewhere between $340 million and $3.4 billion)
In September, the Indian government froze all of Nokia’s assets in the country. The immovable assets that Nokia has in India are worth between $330 million and $490 million, they also include a large Nokia factory in Chennai that employs 8,000 workers. Nokia is working to get those assets unfrozen by Thursday so they can be transferred to Microsoft as part of their deal.
However, the Indian government isn’t willing to unfreeze Nokia’s assets until they pay the entire tax bill and promise to pay any other liabilities. Nokia set aside $350 million in an escrow account in hopes to free up those frozen assets.
A ruling from the Delhi High Court is expected Wednesday. We’ll keep you updated on the outcome.