Nokia is at the center of a tax scandal in India after authorities reportedly raided the mobile phone-maker’s operations in Chennai over claims that it owes $540 million in unpaid taxes.
According to the Economic Times, 20 officials arrived at the company’s plant at Sriperumbudur around midday local time (07:00 GMT) but it remains unclear whether their presence will force the Finnish company to suspend its operations.
Update: Nokia has provided a response which is below.
Officials are said to have anonymously told the newspaper that the company “hasn’t paid tax in India”; it is being suggested that the firm may owe as much as 3,000 crore (roughly $542 million) in unpaid taxes. The newspaper reports that the raids will continue until the evening, it is not confirmed whether they will resume tomorrow.
Nokia isn’t the first international technology firm to come under the spotlight for tax in India. Search giant Google incurred the wrath of officials in November last year, with newspaper reports speculating that the firm could face a near $14 million fine for false accounting. Like today’s news, sources were also anonymous and exact details were sketchy.
Google did not comment on the claims, but the search giant appears to have since evaded the concerns which centered around the way that the company manages its AdWords income, and other financial matters, through its international base in Ireland. From speaking to sources in India at the time, TNW understands that Google was operating inside of India’s law with its set-up but, as was the case in the UK this summer, its approach saved it large amounts of tax payments, which generated attention.
The exact grounds of the complaint have not communicated at this stage, but we’ve reached out to Nokia for details.
Update: A Nokia spokesperson provided TNW with the following comment:
Earlier today, tax officials visited Nokia’s manufacturing unit in Chennai. Nokia is fully cooperating to ensure they get the necessary information to help in their inquiry. Our operations in Chennai are continuing unaffected.
As a global company, Nokia consistently fields a large and steady number of tax queries, audits and assessments. Nokia’s commitment to being a good corporate citizen is firm and unwavering: we always observe applicable laws and rulings in the countries where we operate. This has been a core principle of our operations in India, where Nokia has been present since 1995.
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