Nepal to tax TeliaSonera for sale of Ncell

telecomasia.net

The Nepalese government has decided to charge TeliaSonera capital gains tax on the sale of an indirect majority stake in local operator Ncell in 2015, according to the Kathmandu Post.

Sweden's TeliaSonera sold its 100% ownership in Reynolds Holding, which itself held a 60% stake in Ncell, to Malaysia-based Axiata Group in December of that year for $1.03 billion as part of its planned exit from Asian markets.

The deal, the largest single transaction in Nepal's corporate history, closed in April last year.

But Nepal's tax authority made efforts to tax the transaction only after the deal had closed, and government officials had been split over whether capital gains tax should be charged on the buyer – through Ncell itself -  or the seller in the transaction.

Some officials as well as TeliaSonera had also taken the position that no capital gains tax should be needed to be paid, because as a holding company listed in a tax haven, Reynolds Holding is not subject to Nepal's tax rules and the transaction should be considered to have taken place offshore.

The resolution of the controversy will free up Ncell from a restriction imposed by the government on expanding its business unless it settles the tax issue, allowing the company to proceed with its stalled 4G launch, the report states.

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