Nokia writes to PMO, seeks tax dispute settlement under bilateral treaty

Finnish handset maker Nokia Oyj has written to Prime Minister Manmohan Singh seeking an "amicable resolution" of its tax dispute in the country, the company said in Helsinki on Wednesday.

Nokia was, last year, slapped with a tax demand of about $348 million (a little over Rs2,000 crore), and the company would have to pay $3.5 billion (Rs20,923 crore), including potential claims, interest and penalties, if it loses a legal battle over the demand.

Nokia's tax dispute is one of several such disputes involving foreign companies in India. Vodafone Plc, IBM Corp and Royal Dutch Shell Plc are among the other foreign firms contesting Indian tax claims.

Nokia said it was seeking a resolution to the dispute under an investment pact between India and Finland, which dates back to 2003, but did not elaborate on the letter's content.

A Nokia spokesman in Helsinki declined further comment.

Nokia last month completed the $7.5-billion sale of its mobile handsets business unit to Microsoft Corp, but excluded its Indian handsets plant from the deal pending resolution of the tax dispute.

Vodafone last week said it had begun an international arbitration against the Indian government in its more than $2-billion dispute.