'Nokia changing accounting, business model to avoid taxes'

Chennai, Jan 9 (IANS) The Income Tax department Wednesday said the Indian subsidiary of Finnish mobile handset-maker Nokia has changed its accounting model and is reorganising its existing business model to avoid direct and indirect taxes.

"It is observed that the company has changed its accounting model and also it is in the process of reorganising the existing business model to bypass certain direct and indirect tax liabilities," the department said in a statement after its "survey" of Nokia's corporate office in Haryana and factory at Sriperumbudur, near here.

According to the department, some more clarifications have been sought from Nokia and the evidence gathered needs further investigation before a final decision is reached on the company's tax liabilities.

A team from the tax evasion detection wing of IT department Tuesday began a "survey" at the premises of Finnish handset-maker Nokia's Indian subsidiary which ended Wednesday morning.

In IT parlance, "search" and "survey" are different terms.

In a search operation, the business and residential premises are searched and the officials have the power to seize documents.

However, a survey is done only in the business premises when there is a suspicion of tax evasion.

IT officials are confident that prima facie there is a strong case against Nokia for evading tax to the tune of around Rs.2,500 crore.

"We have a prima facie case against Nokia's Indian subsidiary. For the past six years the company has paid around Rs.20,000 crore-Rs.25,000 crore as royalty to its Finnish parent without deducting tax at source," a senior official in the investigative wing of the IT department told IANS.

According to the department, Nokia India has been downloading software from its parent company to make the handsets here.

Nokia's Indian plant near here makes over 20 different models and is one of its largest global facilities involving an outlay of around $300 million.

IT officials said Nokia executives had been asked to come Jan 16 for further clarifications.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.

Matches

    • Team flag for Sri Lanka vs. Team flag for PakistanPAKSL
      5th ODI
      Sun, Jul 26, 2015
      Hambantota, Sri Lanka
      Pakistan in Sri Lanka ODI ...
      SL won by 165 runs
    • Team flag for Netherlands vs. Team flag for ScotlandSCONED
      Final
      Match abandoned
      Sun, Jul 26, 2015
      Malahide, Dublin, Ireland
      World Twenty20 Qualifier, ...
    • Team flag for Hong Kong vs. Team flag for IrelandIREHK
      3rd Place Play-off
      Match abandoned
      Sun, Jul 26, 2015
      Malahide, Dublin, Ireland
      World Twenty20 Qualifier, ...
  • No live matches are in progress.
    • Team flag for England vs. Team flag for AustraliaAUSENG
      3rd Test
      Wed, Jul 29, 2015
      Birmingham, England
      The Ashes, 2015...
      Upcoming match
    • Team flag for Bangladesh vs. Team flag for South AfricaSABAN
      2nd Test
      Thu, Jul 30, 2015
      Mirpur, Bangladesh
      South Africa in Bangladesh...
      Upcoming match
    • Team flag for Sri Lanka vs. Team flag for PakistanPAKSL
      1st T20I
      Thu, Jul 30, 2015
      Thu, Jul 30, 2015
      Colombo, Sri Lanka
      Pakistan in Sri Lanka T20 ...