Nokia tax probe: PwC says India arm questioned

NEW YORK Fri Jan 18, 2013 11:54am IST

Illustration picture shows Nokia logo on used cell phones, in Zurich, April 30, 2012. REUTERS/Christian Hartmann/Files

Illustration picture shows Nokia logo on used cell phones, in Zurich, April 30, 2012.

Credit: Reuters/Christian Hartmann/Files

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NEW YORK (Reuters) - The Indian affiliate of global accounting firm PricewaterhouseCoopersPWC.UL was questioned on Thursday by tax authorities looking into possible tax evasion by Finnish phone maker Nokia(NOK1V.HE), a spokesman for PwC confirmed.

Tax officials last week raided Nokia's production unit in Chennai, one of the company's biggest facilities.

A senior Indian tax official said the investigation related to allegations that Nokia may have evaded around 30 billion rupees in taxes. Nokia has said it was cooperating with the probe.

PwC's arm in India both audits and provides tax advice to Nokia, said Mike Davies, a spokesman for PricewaterhouseCoopers International Ltd. Auditor independence standards in India allow firms to both audit and provide tax advice to the same client, he added.

PwC's Indian affiliate has said they are fully cooperating with tax authorities on the matter.

Newspapers in India reported last week that PwC would be called in for questioning on the Nokia tax case.

British telecommunications carrier Vodafone Group Plc (VOD.L) is also being pressed for payment of $2 billion in disputed taxes in India on its 2007 acquisition of mobile telecom assets.

Tax disputes are becoming more common as governments around the world faced with large deficits crack down on tax avoidance in search of new revenues.

(Reporting by Dena Aubin, additional reporting by Ritsuko Ando in Helsinki, editing by G Crosse)

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