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India's tax authority says that Microsoft originally wanted to buy a stake in Nokia

Posted: , by Alan F.

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India's tax authority says that Microsoft originally wanted to buy a stake in Nokia
In India, prosecutors have Nokia in court over a large tax bill that amounts to INR 21,153 crore (a crore is a unit of 10 million). The figure, which was calculated by the director general of income tax and the chief commissioner of income tax, is at issue in India's Tax Court. According to the Indian Tax Authority, Microsoft's original deal with Nokia was designed with the Redmond based software giant taking a stake in the Finnish handset manufacturer and the deal's final evolution, which ended with Microsoft buying Nokia's Devices and Services business, is a "convenient coincidence and is an internal collusive agreement".

The original tax case came from the result of seven years of payments from Nokia India Private Limited to Nokia Corporation without any taxes withheld by the Indian company. As far fetched as it seems, the Tax Authority in India is claiming that Microsoft and Nokia revised the deal from an equity investment to an outright purchase of assets to help Nokia paying avoid Indian taxes. That does seem a little hard to swallow, but read the statement below and you can come to your own conclusion.

"The decision of Microsoft Corporation to not purchase equity shares of Nokia Corporation and to purchase its assets only which are already attached by the department is a convenient coincidence and is an internal collusive agreement"-India's Tax Authority

The Financial Express newspaper in India noted that "The ACIT (India's Tax Authority) has also drawn attention to the fact that the Microsoft-Nokia agreement has undergone two amendments without there being any independent valuation of assets by a third party."

source: FinanacialExpress via NokiaPowerUser, WMPoweruser

9 Comments
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posted on 07 Dec 2013, 20:05 9

1. xperiaDROID (banned) (Posts: 5629; Member since: 08 Mar 2013)


Trojan Flop and Money Mortimer had a mission all along, and it was to buy Nokia and ruin it. And now, mission accomplished.

Please send these two greedy hamsters to Apple, I want them to blend it to Apple juice.

posted on 08 Dec 2013, 04:19 1

9. Leo_MC (Posts: 603; Member since: 02 Dec 2011)


Why spend billions of dollars to ruin a company that, not only is not your contender, but also makes money for you?!

posted on 07 Dec 2013, 20:13 1

2. srvricky (Posts: 11; Member since: 14 Jul 2013)


Really ask an Indian about the Tax authority of India :) u people need to learn a lot about them.

posted on 07 Dec 2013, 21:06 1

3. alterecho (Posts: 1092; Member since: 23 Feb 2012)


So does this affect the the merger in anyway, or is it just talk?

posted on 07 Dec 2013, 22:11 1

5. Gaurav008 (Posts: 283; Member since: 20 Jul 2012)


Basically.
http://m.bgr.in/manufacturers/nokia/nokia-will-have-to-clear-rs-6500-crore-tax-liability-finance-ministry/
http://m.bgr.in/manufacturers/nokia/nokias-rs-2250-crore-offer-to-indian-government-rejected-chennai-plant-in-a-limbo-ahead-of-microsoft-acquisition/

posted on 08 Dec 2013, 01:29

7. alterecho (Posts: 1092; Member since: 23 Feb 2012)


I've read those before. Looks like the deal will still fall throuh.

posted on 07 Dec 2013, 21:19 8

4. corporateJP (Posts: 1877; Member since: 28 Nov 2009)


Microsoft buying an interest in Nokia instead of the whole Devices & Services Division would have been much more palatable. The Nokia name and consumer trust would have still been out there plus Microsoft could keep their OS on Nokia phones. Come 2016, Nokia can come back with Android or Sailfish and Microsoft will only have stale Lumias and Ashas and (for some strange reason) the right to make feature phones and put the Nokia name on them. They both would have been better off if Microsoft bought their outstanding stock and a few seats on the board.

I personally hope Nokia comes back hard in 2016.

posted on 08 Dec 2013, 00:19 6

6. nokia12 (Posts: 367; Member since: 19 Nov 2013)


+1 the best thing about this deal is that nokia is done with microsoft now ..
and they didn't even gave ms the right to use "nokia" name on smartphone that is the best thing ..
the likely effect is going to be

all other OEM back out from windows phone .. who wants to compete with microsoft who controls their own OS ?

microsoft introduces lumia or MS lumia .. some units will sell in USA where ms has strong market presence .. but only 5 % market share but it will flop in countries like India and china which has a good windows phone market share because of lumia 520 .. people will be like wtf a ms lumia phone ha ha it looks like a cheap copy cat of nokia phones

btw nokia has invested in tizen OS maybe they are planning to go in every OS by 2016

posted on 08 Dec 2013, 04:13

8. chandancherry (Posts: 30; Member since: 25 Jun 2013)


+1
thank you for showing a +ve side of this deal concerned with Nokia's future..
Hopes On!!

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