The Supreme Court of Nepal has issued a written order for Ncell and Axiata Investments UK to pay tax in relation to the indirect transfer of the 80% stake in Ncell, Axiata Group confirmed in a stock exchange filing.
The transaction involved the sale of Reynolds Holdings, the holding company for the stake in Ncell, from the previous foreign owner of the operator, TeliaSonera.
As per the court order, Nepal's Large Taxpayers Office has been instructed to determine the outstanding taxes due to be paid in relation to the transaction within three months.
The court has also ordered a freeze on Ncell's payment of dividends or the sale of Ncell shares until the tax debt is paid.
Axiata said the company and Ncell are “reviewing the decision of the Supreme Court”, but that pending the review the companies wishes to reiterate that they have “complied with all relevant regulatory and legal requirements in relation to the transaction.”
The issue of who should pay tax on the sale of TeliaSonera's former stake in Ncell has been widely debated since Axiata bought out the 80% stake for $1.36 billion in 2015.
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