Print Edition - 2018-01-04 | MONEY
LTO serves notice to former Ncell owner
- capital gains tax
In April 2015, Telia sold 60.4 percent stake in Ncell to Axiata which also acquired another 19.6 percent stake in Ncell from SEA Telecom Investments BV, a company owned by the Kazakhstan-based Visor
Jan 4, 2018-The Large Taxpayer Office (LTO) has published a notice directing Telia Company—the previous owner of Ncell—to deposit capital gains tax of Rs65.4 billion imposed on the sale of the telecom company to Axiata Group.
The notice was issued 10 days after the Supreme Court cleared the way for Ncell to repatriate its dividend from Nepal.The amount, according to the LTO’s notice published on Wednesday, includes interests and fees accumulated till January 2, 2018.
“The Telia Company is duly notified to pay all tax dues within the period of 15 days from the date of this notice,” read the notice.
“It is further notified that this office will be compelled to expedite tax collection and recovery actions by applying all or any of the needful procedures prescribed in the Income Tax Act.”
LTO Chief Ganga Ram Gelal told the Post that the taxpayer’s office will explore ways to recover tax from the Swedish company including diplomatic channels if it fails to recover the dues.
The LTO’s decision came at a time when the apex court ruled that legal issues related to determining capital gains tax in the share transfer between Nepali and foreign companies should be decided by a full bench. “We have not received such a notice and we are doing our regular job,” said Gelal.
On December 25, the apex court allowed repatriation of profit earned through investment made in Ncell. The government had barred dividend repatriation until the issue of capital gains tax related to the Ncell buyout deal was settled.
Stating that obstruction of dividend repatriation would adversely affect the company and its shareholders, the court directed the government authorities not to obstruct the process.
Acting upon the Large Taxpayers Office (LTO)’s request, the Nepal Rastra Bank on July 10 had issued directives to banks and financial institutions not to provide foreign exchange facilities to the companies associated with Ncell—Axiata and Reynolds Holdings Limited, among others. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary registered at Saint Kitts and Nevis, a tax haven.
In April 2015, Telia, a Sweden-based telecom company, sold 60.4 percent stake in Ncell to Axiata, the Malaysia-based telecom giant. Axiata also acquired another 19.6 percent stake in Ncell from SEA Telecom Investments BV, a company owned by the Kazakhstan-based Visor. Axiata had acquired these stakes for Rs144 billion. Ever since the deal, the government has maintained that tax will be levied on the transaction while TeliaSonera has argued the deal is not taxable in Nepal.
The LTO in June concluded that the government needs to recover Rs60.71 billion in capital gains tax from the Ncell buyout deal.
Following pressure from the government, Ncell has so far deposited Rs23.6 billion, of which Rs9.97 billion was paid in May 2016 and the remaining Rs13.6 billion in the first week of June.
Published: 04-01-2018 08:28