Ncell wins legal challenge over capital gains tax bill

28 Aug 2019

Nepalese mobile operator Ncell has won its legal case challenging the NPR63 billion (USD540 million) capital gains tax bill imposed by the country’s Large Taxpayer’s Office (LTO) following Malaysian telecoms group Axiata’s acquisition of an 80% stake in Ncell from Sweden’s Telia Company in 2016, reports Nepal’s Supreme Court quashed the LTO’s calculation and Ncell now faces an outstanding tax bill of NPR22 billion, since the firm has already paid NPR23 billion of the total NPR45 billion liability. Axiata had argued that the LTO failed to comply with procedures set out in the country’s Income Tax Act for making a tax assessment and should not have levied late payment fines on Ncell for the period preceding 6 February 2019, when the Supreme Court ruled Ncell and not TeliaSonera was liable for capital gains tax. However, the court warned in its verdict that the LTO is free to levy extra tax if it finds evidence of additional taxable income over and above the NPR143 billion capital gains resulting from the acquisition.

Meanwhile, Nepal’s telecoms regulator, the Nepal Telecommunications Authority (NTA), has renewed Ncell’s mobile licence for a further five years after the operator paid NPR4 billion, the first of five annual instalments totalling NPR20 billion.

Nepal, Ncell Axiata, Nepal Telecommunications Authority (NTA)