KUALA LUMPUR (July 11): Nepal’s central bank has barred Axiata Group Bhd from repatriating its dividends until the issue of capital gains tax (CGT) related to the Ncell deal is settled, the country’s top English daily reported.
 
The Himalayan Times said the Nepalese tax administration is in the process of taking necessary steps to recover the CGT owed from the deal and will not allow Axiata to take away the dividend until the selling company clears its tax liability.
 
Last year, Axiata acquired Ncell (Pvt) Ltd’s stake from Swedish company Telia Company AB (TeliaSonera).
 
Under Nepalese’s income tax law, a 25% CGT is applicable in any major deal, with 15% to be paid by the acquiring company and the remaining 10% by the selling company.
 
Axiata as the acquirer has so far filed 23.56 billion Nepalese rupees (RM981 million) in two phases, as CGT and has claimed that it has cleared all its tax liabilities.
 
TeliaSonera meanwhile has claimed it has met all tax requirements while operating Ncell between 2008 and 2016.
 
However, it is still unclear as to how the tax administration will recover the taxable amount from TeliaSonera, as the Swedish company has “refused to cough up any money and has already left the country” after divesting its stake to Axiata, the Himalayan Times said in its report.
 
TeliaSonera has already repatriated its dividend till fiscal 2011-12.

Under the share purchase agreement between TeliaSonera and Axiata, the Malaysian group will repatriate the dividend after fiscal 2012-13. Axiata has already submitted a request to the central bank for dividend repatriation.
 
The newspaper cited central bank officials as saying Axiata has set aside 72 billion rupees (RM3 billion) for dividend repatriation for the period between 2012-2013 to 2015-2016.
 
“As the custodian of the foreign exchange reserve, the central bank is authorised to issue the final approval for dividend repatriation,” the report said.