PwC says India arm questioned in Nokia tax probe

Thu Jan 17, 2013 1:35pm EST

* PwC audited, provided tax advice to Nokia in India

* Probe centers on allegations of tax evasion by Nokia

* India also pressing Vodafone for disputed tax payment

By Dena Aubin

NEW YORK, Jan 17 (Reuters) - The Indian affiliate of global accounting firm PricewaterhouseCoopers was questioned on Thursday by tax authorities looking into possible tax evasion by Finnish phone maker Nokia, a spokesman for PwC confirmed.

Indian tax officials last week raided Nokia's production unit in the southern city of 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 ($543 million) 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 is also being pressed for payment of $2 billion in disputed taxes in India on its 2007 acquisition of mobile telecom assets. Vodafone has insisted that no taxes are due.

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.