Nokia's Indian tax bill could reach $3.4B


Nokia's (NOK) tax bill in India could hit $3.4B, a government official says, far higher than the $340M that has been at the center of a dispute so far.

India has frozen Nokia assets in the country to ensure the company has enough money to pay the smaller bill, although the firm has gone to court to defend itself.

Nokia needs access to the assets by Thursday so that it can complete the sale of its handset unit to Microsoft (MSFT), and it has set aside $350M for the purpose.

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Comments (29)
  • Timothy Bryan
    , contributor
    Comments (984) | Send Message
     
    lol moronic India is digging its own grave...
    10 Dec 2013, 07:10 AM Reply Like
  • Finland!
    , contributor
    Comment (1) | Send Message
     
    Nokia will not pay anything. Taxes already paid to Finland.
    10 Dec 2013, 07:21 AM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
     
    Lucky you! How did you manage that?
    10 Dec 2013, 09:06 AM Reply Like
  • BBcool
    , contributor
    Comments (1081) | Send Message
     
    maybe I should change my name to Finland too
    11 Dec 2013, 01:38 AM Reply Like
  • La Rue
    , contributor
    Comments (899) | Send Message
     
    Dumber than a fence post !!!
    10 Dec 2013, 07:32 AM Reply Like
  • junior55
    , contributor
    Comment (1) | Send Message
     
    Agree with Diablogun
    10 Dec 2013, 07:36 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2146) | Send Message
     
    A detailed discussion on this topic here:
    http://bit.ly/19yO4HM

     

    See also here:
    http://seekingalpha.co...
    10 Dec 2013, 07:38 AM Reply Like
  • BBcool
    , contributor
    Comments (1081) | Send Message
     
    seppo what do you foresee?
    10 Dec 2013, 02:30 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (2146) | Send Message
     
    Pretty muddy waters, but the bottomline for me still is that I do not see this derailing the D&S deal, or causing substantial financial stress to Nokia in the end (i.e. beyond a few hunred million $$). The key for Nokia is how well Nokia Group is isolated from Nokia India.

     

    My longer write-up / thoughts here:
    http://bit.ly/18SvrEl
    10 Dec 2013, 02:39 PM Reply Like
  • patt2374
    , contributor
    Comments (733) | Send Message
     
    India is heading back, full steam, to pre 1991.
    They came came out of a command control economy, had a sniff around, made some good money and society began to become more mobile but the old powers that be decided that too much change was not in their best interest as they would be usurped by an up and coming western style entrepreneurial class.
    So now the Congress Party and it's long established cronies are throwing up governmental road blocks to progress where ever they can because when the peasants start to read and write they start to demand things like equal treatment under the law, better schools, better infrastructure and transportation etc.(The BJP is more business friendly but much more punitive towards the 1/5 of population that is Muslim and shut out by both parties from advancing but kept by the Congress Party like a pet on a leash because of the BJP's radical religious right wing.)
    ( Sound familiar to anyone here in America?)
    This Nokia case is just another example of the Indian Government trying to halt free market economic progress that looked so promising just 5 years ago and head back to a more centrally controlled governmental state where all outside business interest are viewed with suspicion.
    Finns pay their taxes!!!! They are not like other westerners- like me.

     

    Is this an over simplification? Yes
    However is it an accurate over simplification? That answer too is yes
    10 Dec 2013, 08:32 AM Reply Like
  • DWD Investing
    , contributor
    Comments (13055) | Send Message
     
    "India is heading back, full steam, to pre 1991."

     

    Please layout your premises and conclusion so we can see the progression back to 1991 values. Please be specific how each premises relates to either other premises and your conclusion. Thank you and hope your wishes come true, for your wishes are my wishes. I don't invest on wishes, however. (And, I don't believe in witches. Wait, that's another post somewhere else.)
    10 Dec 2013, 04:48 PM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
     
    India is a big place, and its separate regions have a large degree of autonomy, so making predictions for the whole country, on the basis of the actions of a few governors, or even the central government, is unsafe.
    11 Dec 2013, 09:51 AM Reply Like
  • sidiji
    , contributor
    Comments (255) | Send Message
     
    indian shooting the 30,000 people depending on nokia plant, and shooting prospect of msft as major employer going forward, using bad retroactive law to effectively shake down foreign companies. Vodaphone won in High Court against similar tactics. Indians changed laws all the way back to 1962...is ludicrous.

     

    EU need to see this as the trade war that it is becoming and stand up and put a stop to this abuse.
    10 Dec 2013, 08:48 AM Reply Like
  • RHMASSING
    , contributor
    Comments (565) | Send Message
     
    It is a shakedown by the Indian government for sure. However doesn't it sound familiar in that our government is shaking down JPM for 18 billions and, instead of using the money to compensate the people hurt, it says to use the money to give to its pet projects and its supporters! Corruption of governments is not limited to certain countries only. Indian's action will set its progress back, like our country has been set back continuously.
    10 Dec 2013, 01:05 PM Reply Like
  • patt2374
    , contributor
    Comments (733) | Send Message
     
    RHMSSAAING-
    You are most certainly correct. Corruption exists in every government.America, my country, is one of the more underrated countries in the world when it comes to corporate and governmental corruption. We just cover it up better with all our phony whistle blower laws and human resource manuals that are really only there to protect the corporations and the government.

     

    The question really becomes how much corruption can you afford as a country. Rich countries like the USA and Western Europe( the Club of 40 if you will) can just simply afford more corruption much in the same way the founder of Oracle can afford to blow more money-billions- on winning the America's Cup Yachting Race when no really cares and I can not afford to replace the scratched lenses in my prescription sun glasses because it would be money I would have pull away from putting into my kids college funds.
    Even corruption operates on economies of scale. In India this why the Nokia tax case is so magnified and so appalling. ( I do read the Chennai news papers on line daily as I lived and worked in Southern India from January 1995 until December 1999 building high end construction material plants with the occasional trip to Delhi for a pay off)
    11 Dec 2013, 08:54 AM Reply Like
  • NOKfan
    , contributor
    Comments (68) | Send Message
     
    I think treating employers this way may ultimately be a disadvantage for India. Other corporations may not want to deal with this drama, especially companies with less cash.
    10 Dec 2013, 08:54 AM Reply Like
  • vk007
    , contributor
    Comments (81) | Send Message
     
    If Indians are successful with NOK then there'll be many more companies on the line of fire.
    10 Dec 2013, 08:58 AM Reply Like
  • ewmpsi
    , contributor
    Comments (1697) | Send Message
     
    In order for any ideal to win, alternatives must fail and be hung in effigy and those who championed the alternatives (failed beliefs) must be vilified and removed from power.

     

    I won’t beat a drum for democracy or capitalism, but if these ideals are to win in India, all other alternatives must fail the people, and the people must turn against those alternatives. India has not failed enough yet to become angry enough to oust those who are hindering their progress.

     

    Once they create a place where the new ideals that they wish to embody can't possibly flourish and suffer the consequences of such an environment, only then will they take steps necessary to take the next huge and brave leap necessary to freedom and prosperity (if such a thing exists).

     

    This is coming from a westerner surrounded by illusions that keep getting holes poke in them causing me to question if these ideals exist only as a figment of our collective U.S. imaginations :-\
    10 Dec 2013, 09:04 AM Reply Like
  • wrscomncents
    , contributor
    Comments (1050) | Send Message
     
    "I won’t beat a drum for democracy or capitalism"

     

    Go ahead and beat it. When it exist unencumbered it works quite well.
    10 Dec 2013, 11:48 AM Reply Like
  • gwynfryn
    , contributor
    Comments (6458) | Send Message
     
    When they exists unencumbered, they does work quite well for the Capitalists and politicians, but who else?
    11 Dec 2013, 09:54 AM Reply Like
  • wrscomncents
    , contributor
    Comments (1050) | Send Message
     
    "When they exists unencumbered, they does work quite well for the Capitalists and politicians, but who else? "

     

    Well how about the entrepreneur's, the stock holders, the people they employ, the consumers that purchase the products they produce, the wealth that is produced, the taxes that they pay to build the infrastructure, the charities they give to, just to name a few.
    11 Dec 2013, 11:04 AM Reply Like
  • mr wonder
    , contributor
    Comments (574) | Send Message
     
    India is presenting an arbitrariness kind of robbery:
    - implementing retroactive tax law,
    - formulating unfunded liabilities by different and separate income tax authorities (DGIT/ CCIT/ ACIT),
    - freezing all kind of assets in order to blackmail their victim,
    - adding extremely high interests and other penalties, just to triple the original claim.

     

    This is an humiliating joke to all international companies in India and should be considered as a huge warning to anyone who is considering to do business in India.
    10 Dec 2013, 09:48 AM Reply Like
  • Randal James
    , contributor
    Comments (4415) | Send Message
     
    Recently on other topics I've been encouraging people to look at the county's GNP per person. China sits below the world average and India at about 1/3 the world average - it is a hugely populated land with not much income. This is both a huge opportunity and a warning sign and the Indian officials are flashing the warning sign in bold letters visible worldwide.

     

    I would suggest what they are truly trying to accomplish is Nokia's withdrawal from the country to the benefit of their underfunded and underteched homegrown companies.

     

    In recent years, some Indian companies have enjoyed acceptance in the West. Ding! Time's up.
    10 Dec 2013, 10:41 AM Reply Like
  • DWD Investing
    , contributor
    Comments (13055) | Send Message
     
    Randal,

     

    It is truly an thoughtless war they cannot win. They can't even win the battle.
    10 Dec 2013, 04:51 PM Reply Like
  • MysteryGuest
    , contributor
    Comments (12) | Send Message
     
    If I were Nokia, I would pull everything out of India immediately. I would lay off the thousands of employees that depend on me for a paycheck and let the Indian government explain it to them. Then and I would tell the mobile operators "sorry, try moving to a more business-friendly country". Business in India is typcially not profitable anyway - this move would probably help the company bottom line in the long run
    10 Dec 2013, 11:59 AM Reply Like
  • asifruman
    , contributor
    Comments (72) | Send Message
     
    Indians are being wrong here. I cant expect Finnish giant co would avoid taxes. Very bad attitide towards foreign companies. Is it about gettimg rid of nokia just to support made in india jwrk phones??
    10 Dec 2013, 03:30 PM Reply Like
  • DWD Investing
    , contributor
    Comments (13055) | Send Message
     
    If you all check my other post on this subject, I said that after the 340M assessment, then the 1B assessment, that the price will be as much cash as Nokia has on hand.

     

    First it was 340M. Then, after the deal, it was 1.2B, and now, it's ballooned to 3.4B.

     

    It's easy to see what is happening here. India is letting the deal get close, and then trying to extort ever increasing amounts of money from Nokia. Their leverage is the MS deal. That's all they have, unless Nokia actually owes them 3.4B, or some number of cash. If they do then they should pay. If not, then after the deal is done, India has no more leverage.

     

    They then have two choices: (1) Take the 300M or (2) take it in the shorts. And if Nokia is clean legally, Nokia should sue India for any lost revenues and expenses too, or in exchange for the legal LTE contracts.
    10 Dec 2013, 04:56 PM Reply Like
  • slcUTAH
    , contributor
    Comments (542) | Send Message
     
    I have a bad feeling about this and NOK's share price could take a large hit come Thursday or Friday. I won't be selling my shares as this India extortion is only a short term speed bump and Nokia has much potential going forward. I'll be monitoring this closely.

     

    -Cheers.
    10 Dec 2013, 08:06 PM Reply Like
  • Richard Waldren
    , contributor
    Comments (269) | Send Message
     
    It is obvious India is extorting NOK. If I were doing business in India, I would get the hell out of Dodge. There are plenty of places in the world that would love to have any business. Isn't it funny. manufactures look for a cheap place to do business and they get the shaft. Besides it is hard to understand the people on the phone.
    11 Dec 2013, 01:29 AM Reply Like
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