Finland Steps In to Help Nokia Resolve India Tax Dispute

Nokia Oyj (NOK1V), facing a claim for unpaid taxes in India, is getting help from its home country, Finland, which is pushing for a resolution in the dispute.

Finland’s Communications Minister Krista Kiuru traveled to India and met with her local counterpart Kapil Sibal, asking him to help solve the situation, the Finnish ministry said in a e- mailed statement today.

Nokia, a mobile-phone maker struggling with mounting losses, said last week tax officials visited its manufacturing unit in Chennai in southern India, claiming the company had failed to pay an undisclosed amount of taxes. Once Europe’s most valuable company, Nokia is still one of Finland’s largest private employers even after sales declines and job cuts.

India’s government is also pressuring Vodafone Group Plc (VOD), saying the carrier owes $2.2 billion due to changes in tax laws applied retroactively.

Separately, Espoo, Finland-based Nokia said today it is transferring about 820 employees to India’s Tata Consultancy Services Ltd. (TCS) and HCL Technologies Ltd. (HCLT) as part of a reorganization and cost-reduction effort announced in June. The company also said it will eliminate 300 jobs as part of the previously-announced cuts.

Kiuru said in the ministry’s statement that Finland’s relationship with India is good and the talks took place “in candid and good spirit,” adding she believes the tax issue can be resolved.

Nokia was little changed 3.47 euros at 10:47 a.m. in Helsinki.

To contact the reporter on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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