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Nokia Hit Hard by India Tax Fine

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angeldowrothy
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Re:
angeldowrothy   12/21/2013 5:43:29 AM
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The taxes they are paying now is legal and rightful, previously they were paying very much less.

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Ariella
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Supply Network Guru
Re: Update on the issue...
Ariella   2/4/2013 8:27:47 AM
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@Cryptoman Yes, it would make sense to allow Nokia time to make the payments because if it is forced to fold because it can't come up with that sum all at once, they'd end up getting nothing or very close to nothing.

Cryptoman
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Re: Update on the issue...
Cryptoman   2/4/2013 4:12:34 AM
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@Ariella

To be honest with you, when I read that figure, it gave me the chills. I did feel bad about Nokia.

After six quarters of losses, in Q4 of 2012, Nokia reported a profit for the first time. Unfortunately this profit is dwarfed by the $2.5 billion; it is only $585 million... I have no idea how Nokia will pay for this penalty but one thing is for sure. This penalty will seriously rock its boat.

One thing I don't know is whether this penalty can be paid inb installments to ease the pressure on Nokia. I know that Nokia has been selected the most reliable company of the year three times in a row in India for the last 3 years so the public has a positive feeling about Nokia over there. However, whether the revenues office will be equally supportive is yet to be seen.

I hope Nokia manages to pull through this one.

Ariella
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Re: Update on the issue...
Ariella   2/3/2013 6:27:00 PM
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@Cryptoman, even in our days of huge figures, $2.5 billion is a significant amount. will they be able to cover it?

Cryptoman
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Update on the issue...
Cryptoman   2/3/2013 4:35:23 PM
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The 150 page report that has just been prepared on Nokia has been submitted to the Income Revenue Department in India. This report states Nokia will need to pay a sum of $2.5 billion in compensation for the tax losses.

$600 million of this total amount is due to tax evasion while $1.9 billion is for the illegalities in transfer pricing. Transfer pricing is a term used for defining the suitable pricing of goods and services exchanged between people and companies.

Nokia has not made a statement on this new development yet but it is expected that it will go to court to appeal.

Jacob
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Re: Tax depatment and corporate world
Jacob   1/21/2013 1:33:18 AM
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"US court once ruled that there are no reasons for anyone to pay more in taxes than they are legally obliged to pay. However, any enterprise that also deliberately avoids paying taxes illegally should realize it is committing a crime"

Bolaji, as per law they are suppose to be like that. As long as tax departments are not scrutinizing the corporate world, they can enjoy that. Moreover, it's not easy to scrutinize them from official point of view due to various reasons.

Jacob
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Re: Tax depatment and corporate world
Jacob   1/21/2013 1:30:07 AM
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Cryptoman, the first issue is corporate tax payers can lag as much as they want because income tax departments are not securitizing them properly. So they can rotate the money for running business and moreover tax department won't play with them.  They are more interested in individual tax players, where they can threat them and collect the tax.

Bolaji Ojo
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Re: Tax depatment and corporate world
Bolaji Ojo   1/16/2013 8:19:37 AM
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Most companies have tens and sometimes hundreds of tax experts on their staff who specialize in figuring out ways of reducing tax obligations. A US court once ruled that there are no reasons for anyone to pay more in taxes than they are legally obliged to pay. However, any enterprise that also deliberately avoids paying taxes illegally should realize it is committing a crime.

anandvy
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Supply Network Guru
Re: Nokia
anandvy   1/15/2013 3:46:29 PM
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It's disappointing to read that Nokia possibly evaded taxes, but they certainly aren't the only compnay to take advantage of tax loopholes.

@Barbara, I agree with you. Its really disappointing to see Nokia trying to evade taxes. But its not just Nokia that should be blamed for this. Income-tax officials have said that PwC has advised Nokia and they were aware of the tax evaded and accounting practices. This means that PwC is equally culprit.

Barbara Jorgensen
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Nokia
Barbara Jorgensen   1/15/2013 8:42:42 AM
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It's disappointing to read that Nokia possibly evaded taxes, but they certainly aren't the only compnay to take advantage of tax loopholes. It sounds like India is merely enforcing the laws it has, and other nations are discussing the same strategy. It will be really bad for tech companies if more countries succeed at enforcing their tax laws. In fact, it could be a disaster.

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