Axiata unit appeals against capital gains tax levied


  • Business
  • Tuesday, 23 Apr 2019

PETALING JAYA: Axiata Group Bhd has confirmed that its 80%-owned unit Ncell Pte Ltd will be appealing against the Large Taxpayers Office’s (LTPO) assessment of the outstanding capital gains tax (CGT) amount it owes.

The telecommunications group was supposed to settle the 39.06 billion Nepalese rupees (RM1.45bil) that Nepal authorities had imposed on it as CGT for buying a stake in Ncell, which is the country’s largest mobile player.

By right, the seller should be paying the CGT, but in this case, Axiata’s unit Ncell had been made to pay for it.

Axiata had bought an 80% stake in Ncell for RM1.37bil in 2015 from TeliaSonera Norway Nepal Holdings AS.

In a statement, Axiata said its Nepali unit had submitted a writ petition to the Supreme Court (SC) against the LTPO, Inland Revenue Department of Nepal and the Ministry of Finance of Nepal.

Ncell’s application had been accepted by the SC yesterday, Axiata said.

“Ncell’s writ to the SC asserts that the LTPO has not complied with the procedure as stated in the country’s Income Tax Act for making a tax assessment and has instead used the SC’s order dated April 9 to substitute the amount that the LTPO had previously assessed for TeliaSonera Norway and levied it on Ncell,” Axiata said.

It noted that the SC’s full written order had stated that the LTPO should conduct an assessment to determine the outstanding tax amount to be paid in relation to the indirect transfer of an 80% stake in Ncell by the seller to Axiata Investments (UK) Ltd through the sale of Reynolds Holdings Ltd within three months from the date of receipt of the SC’s order by the LTPO.

“The SC’s order also stated that the responsibility to pay tax lies with Ncell and Axiata,” it added.

Subsequently, on April 16, the LTPO issued a written order to Ncell, stating that the TeliaSonera assessment, in relation to the transaction, had been transferred to Ncell and that the balance amount of the CGT arising from the transaction due was 39.06 billion rupees. Ncell has been ordered by the LTPO to deposit the said amount by April 22.


   

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