After Axiata paid Rs. 13.6 billion Capital Gain Tax (CGT) to the government, Nepal Tax office has now sent a legal notice to Sweden-based Telia to clear its tax liability.
Telia previously owned Ncell and had sold its 80% shares to Axiata for $1.03 billion (Rs. 103 billion) in December 2015. As per the rules, 25 percent of profit made from the buyout sale must be deposited as Capital Gain Tax.
“We have asked the Swedish company to clear the due tax based on their own assessment. If the company fails to respond within the deadline, we will calculate the amount on our own and direct the company to pay the amount.”, said a senior officer at Large Taxpayer Office (LTO).
- According to the estimates made by LTO, Telia is supposed to pay around 36 billion rupees to Nepal, as Capital Gain Tax.
- But since Telia has failed to repay the tax on time, taxman can also add 15 percent interest on the tax amount, which makes it around Rs 61.61 billion.
- However, Telia may not have to pay the whole amount as Axiata has already paid 15 percent of tax on behalf of them.
- Axiata as so far deposited Rs 23.6 billion to the government, out of which Rs 2.1 Billion covers the fine imposed by the government for delaying tax payment.
- Telia now has an option of paying tax on its own or jointly with Ncell.
- If they select the first option, they will have to pay Rs 61.61 billion, and if the second option is selected the amount will be around Rs 48.13 billion.
Meanwhile, Telia still stands on the position that they do not oblige to pay any amount to the Government of Nepal.
On the first week of April, Telia released a statement that stated, “Telia has no tax obligation in Nepal for its foreign part of the transaction. Instead, the taxes should be declared in Norway, which is the home country for [seller] Telia Sonera Norge Nepal (TSNN), which Telia owns with Visor.”
Edited by – Sushil Awale