Finland urges India to resolve Nokia tax dispute

Finland urges India to resolve Nokia tax dispute

Finland's Foreign Minister Erkki Tuomioja has urged the Indian government to resolve the Nokia tax dispute at their earliest possible but declared that Finland was not a party to the dispute.

Finnish handset maker Nokia has already declared that the Chennai plant will not be a part of the Microsoft deal if the freeze on its assets is not lifted by 12th of December, and that the plant could be closed.

Indian tax authorities had issued a tax demand notice of Rs 2,080 crore to Nokia in March this year for not withholding tax on the payment made to its parent firm as royalty for the use of software in its mobile phones.

Urging the Indian government to resolve the issue, Tuomioja said, "The government is not a party to this issue... But we have discussed it. In the worst case, it could lead to the closing down of the Chennai plant, which is employing
8,000 people, and with sub-contractors up to 30,000 people."

He added that no one wanted the closure of a Chennai facility as it is beneficial to India as well as Finland. He even cautioned that the dispute could have an impact on investment sentiment.

Nokia has already has moved the Delhi High Court seeking a directive to lift asset freeze by 12th of December as the freeze would upset the company's deal with Microsoft. The company aims to finalize the deal by the first quarter of next year.

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