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January 8, 2013

Indian tax officials raid Nokia’s manufacturing facility

Nokia's Chennai facility manufactures over 20 different smartphone models

By CBR Staff Writer

Indian Income Tax (IT) Department officials’ raided Nokia’s facility in Chennai city in India.

An AFP report cited a Nokia spokesperson who said that the tax authorities had visited Nokia’s manufacturing unit in India.

"We are fully cooperating to ensure they get the necessary information to help in their inquiry," the spokesperson said.

"We always observe applicable laws and rulings in the countries where we operate."

According to Reuters, the investigations were related to allegations of tax evasion of around INR30bn ($545m) by Nokia.

An Indian tax official said: "We are suspecting a default in TDS (tax deducted at source) on payments to other countries against software supplies."

India, which is said to be Nokia’s second largest market in the world, is a key player in Nokia’s future growth.

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Established in 2006, Nokia’s Chennai facility manufactures over 20 different smartphone models aimed at consumers in emerging markets.

Reports also reveal that the Chennai plant has also been a witness to labour dissatisfaction, as workers claimed their union rights were being restricted.

The raid on Nokia follows Indian tax officials sending a notice to Vodafone, which owed more than $2bn in taxes.

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