Microsoft Corporation (MSFT) and Nokia deal to push forward despite Indian tax dispute

Posted Feb 15, 2014

Microsoft Corporation (NASDAQ:MSFT) is in the process of dealing with tax dispute in India regarding Nokia’s manufacturing plant in Chennai, India. However, Nokia said that this issue will not cause for closing the purchase of their Devices and Services business to Microsoft.

Nokia appealed a ruling by the Delhi High Court that said that the mobile company owes over ?250 million in taxes because of an alleged improper exemption on software exports. There were reports that this litigation would delay the company’s acquisition by Microsoft.

?Nokia would like to stress that recent developments in India related to ongoing tax proceedings are not expected to affect the timing of the closing nor the material deal terms of the anticipated transaction between Nokia and Microsoft, announced on September 3, 2013,? said Nokia in a press release this past week.

The High Court also said that Nokia will have to pay claims the country’s tax authority has not decided upon yet. This is the primary reason why Nokia appealed. The company said that it should be able to dispute any future chargers instead of being obligated to pay them without knowing what the penalties are.

Nokia is going to transfer the Chennai factory to Microsoft as a part of the sale of the Devices and Services business. Nokia chairman and interim CEO Risto Siilasmaa met with India Trade Minister Anand Sharma to discuss the dispute. “We had a very good discussion on the topic,” said Siilasmaa in an interview with The Wall Street Journal.