Microsoft closed a deal to acquire Nokia’s devices and services business in 2014. (Photo: Internet)
Microsoft Mobile Oy Vietnam Co. Ltd, formerly Nokia Vietnam, has paid 191 billion dong ($8.5 million) in corporate income tax corresponding to fiscal years 2013 and 2014 although the firm is supposed to enjoy tax breaks in the first four years of operation, the Hai Quan (Customs) newspaper reported.
Under the Vietnamese legislation, a hi-tech firm will be exempted from income tax during four year after its commencement and have the rate cut by a half in the following nine years.
However, after taking over the Nokia business in the northern province of Bac Ninh, Microsoft Mobile Oy Vietnam did not file application for tax incentives, saying that the previous strategy for Nokia Vietnam underwent changes.
Microsoft Mobile Oy Vietnam proposed postponing the grant of tax incentives for a hi-tech firm to “another suitable timing.” Instead, the company asked for a 50% cut in corporate income tax in four years starting 2015 as applied for projects in an industrial park.
Microsoft completed the acquisition of Nokia’s devices and services business for $7.2 billion in April 2014, and renamed the business to Microsoft Mobile Oy.
Microsoft Mobile Vietnam, formerly Nokia Vietnam, was established in 2011 and is now a wholly-owned subsidiary of Microsoft Mobile Oy. It came into operation in June 2013.
After the Nokia acquisition by Microsoft, the plant in Bac Ninh was positioned as a key facility in Microsoft’s global supply chain. The U.S. giant plans to move 39 productions lines around the globe including China, Hungary and Mexico to Vietnam.