While a tax dispute in India over Nokia’s manufacturing plant in Chennai continues to rage, the company says it won’t cause any problems for closing the sale of its Devices and Services business to Microsoft.
Earlier this week, Nokia appealed a ruling by the Delhi High Court that said the company owed more than €250 million in taxes, primarily because the it says the company claimed an improper exemption on software exports. Earlier reports expressed concern that the ongoing litigation would delay the company’s deal with Microsoft, but Nokia says that’s not the case.
“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,” the company said in a press release today.
In addition to its existing tax bill, the High Court also said that Nokia would be required to pay claims the country’s tax authority has not yet made.That’s why Nokia appealed, saying that it should be able to dispute in court any future charges, rather than being obligated to pay them without knowing what they are.
The company has been slated to transfer the Chennai factory to Microsoft as a part of the sale of its Devices and Services business, but the legal wrangling over taxes may put a wrench into those plans. Nokia’s Chairman and Interim CEO Risto Siilasmaa met with Anand Sharma, India’s Trade Minister, to discuss the dispute earlier this week, according to the Wall Street Journal.
“We had a very good discussion on the topic,” Silasmaa told the Journal.
Nokia said in a press release that it still expects the deal with Microsoft will close by the end of the first quarter of this year. Tax issues aside, Nokia is rumored to be launching a new smartphone that runs Android at Mobile World Congress this month.