Nokia India faced tax demand over royalty payments issue

Nokia India
The Income Tax (I-T) department on Saturday clarified that it has served a tax demand to Nokia India after it completed the assessment of financial year 2010-11 in August this year.

The notice was served regarding the existing dispute over royalty payments to its parent firm.

“An assessment order was passed in the case of Nokia India Pvt Ltd for Assessment Year 2010-11 in August 2015. The tax demand raised by this order was primarily based on issues arising from earlier orders,” a tax department statement said.

“The demand arising from the assessment order passed in August 2015, along with the demands raised earlier are already being considered under Mutual Agreement Procedure (MAP) of the India-Finland tax treaty by the competent authorities in both countries,” it added.

The I-T department had in 2013 slapped a tax notice of Rs.2,000 crore on Nokia’s Indian subsidiary for violating the withholding tax norms since 2006 while making royalty payments to the parent company in Finland.

On the issue, company officials had said: “Nokia has indeed received a claim from the tax authorities — it is largely about the same dispute as earlier, so we have nothing to add.”