Interview- NCell TeliaSonera Tax Case

Nepal Government has started discussing on how TeliaSonera can be charged to tax in Nepal for its deal with Axiata. Bizmandu reports that the government would proceed with collection of tax once official notification is received from NCell. 

But is collection of tax so straightforward for the government? Questions that arise are:

  1. Is tax on indirect transfer of shares an international practice and will it be a possibility for Nepal Government to tax the transaction with or without amendment in the current law?
  2. Is there any provision in DTAT between Nepal and Norway that affects the outcome of this transaction?

Our current legal provisions do not bring indirect tax into ambit of tax law, but the tax office have the right to disregard treaty benefit or corporate structures in case of sham entities, provided they are able to prove it using General Anti Avoidance Rules. Sharing with you my interview in Artha Sarokar on this ongoing issue.