Nokia has offered to pay the Indian government about Rs 3 billion to resolve the tax issue so that its Chennai manufacturing plant can be de-frozen and sold to Microsoft Corporation.
Earlier, in September 2013, Microsoft had agreed to acquire Nokia?s devices and services business for $7.2 billion. Nokia?s Chennai-based manufacturing unit, which supports a workforce of about 8,000, is part of the deal. However, the unit may have to be segregated if the tax issue between the government and Nokia is not resolved before December 12, 2013. In such a scenario, Nokia may have to explore the option of providing contract manufacturing services to the US-based company for about a year.
As part of the offer, Nokia has suggested that it will deposit Rs 7 billion with the court to continue with legal proceedings and later it will deposit Rs 22.5 billion out of the cash generated if the company is allowed to proceed with the planned sale of the manufacturing plant.
Earlier, the Department of Income Tax had sent notices to Nokia Corporation and Nokia India for withholding tax on royalty payments.
