Nokia accused of $545m tax evasion in India; offices raided in investigation

India is one of several emerging markets that are key to Nokia's plans for global success with its new generation of smartphones. Entry-level devices such as the Lumia 510 have been developed specifically with such markets in mind, while the company is preparing to launch its first Windows Phone 8 handsets, the Lumia 820 and Lumia 920, there later this month.

The Lumia 510 was designed specifically with emerging markets like India in mind

So it will come as particularly unwelcome news for the Finnish manufacturer that some of its premises in India were raided earlier today, amid allegations of tax evasion in the country. As The Economic Times reports, income tax officials raided the company's offices in Chennai and a factory in Sriperumbudur, authorities suspect the company of having failed to pay taxes amounting to around 3000 crore INR (roughly $545m USD). One official couldn't have put it more simply: "They haven't paid in tax in India."

A Nokia representative issued a terse confirmation of events to The Economic Times: "Yes, raids are on. I will call back." Since then, Nokia has issued a more substantial statement to TNW, acknowledging a "visit" by tax officials, and asserting that the company is "fully cooperating to ensure that they get the necessary information to help in their enquiry." Nokia also added that its "commitment to being a good corporate citizen is firm and unwavering."

Source: The Economic Times | via TNW | Image via Nokia

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22 Comments

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Sure it's US dollars? That's more than one percent of all Nokia's revenue in 2011.

Just can't be true.

545 mln indian rupees would be $10 mln. Even that still too much for a small subsidiary.

coth said,
Sure it's US dollars? That's more than one percent of all Nokia's revenue in 2011.

Just can't be true.

545 mln indian rupees would be $10 mln. Even that still too much for a small subsidiary.

That's the thing dude. It's not a small subsidiary in India. It's bigger than Samsung and Apple, both combined.

Nokia should learn from other companies how to operate in India. A small amount of bribe(compared to what they have to pay now) could have done the trick. Anyway it's never too late.

Kunal Nanda said,
That would depend on which govt is ruling at the moment.

No. Every govt here is corrupt. Depends on how much you are going to offer.

Can't be true, Nokia aren't popular enough to actually make money these days

inb4: yes I know that Nokia is very popular in the whole asia,india,etc areas with their older symbian phones (which were awesome phones)


tldr; made bold statement about nokia, knows they are still popular in some parts of the world

Tpiom said,
If it turns out to be true, then I laugh at them.

They've been doing shady tricks before.
Look up the Bochum case of 2008. They tricked the city to get tax breaks (iirc it was that kind of financial benefits) and when they announced the closure of the plant to move to Romania (I think it was Romania) we learned that they broke the contract with the city over all those years, because they counted more employees than they had (they counted temporary workers as fully employed).

They've been clinging on their status of the top Western phone brand so much, but neglected the market changing so much during all that time.
So eventually they decided to go some shady ways in order to stay afloat.

It's a pity, because they have excellent build quality, but they totally underestimated the market demands.
Now they are becoming slowly but surely an option to be bought up by Microsoft for example.
Wouldn't surprise me. Google did it too with Motorola and it's a smart move for anyone of the three big players.

If it weren't for RIM doing the same mistakes as Nokia we'd see how well BB would be off in today's world.

GS:mac

ingramator said,
They all do it, may as well fess up.

Most companies engage in tax avoidance, which is frowned upon but technically legal. Evasion is illegal, and would probably result in management going to a federal PMITA prison, especially for half a billion dollars. Most companies will 'fess up to a bit of avoidance even if it does cost them some sales (see what happened in the UK regarding Starbucks Amazon and Google avoiding taxes). Admitting to evasion on the other hand would be very very bad for business.

thealexweb said,
Swap out the word Nokia for Google / Motorola in the article and the amount of hate would skyrocket XD

Or swap out Nokia for Apple...same response really.

thealexweb said,
Swap out the word Nokia for Google / Motorola in the article and the amount of hate would skyrocket XD
Not in Neowin Microsoft fanboys hq.