The Axiata has further said that Axiata UK or Ncell has no dues payable to the Nepal government. “The tribunal has indicated in the award that Nepal should refrain from demanding any further tax, fees, penalties, or interests in relation to the transaction,” reads the press statement. “Arising from Nepal’s non-adherence to tribunal orders during the early stage of the process, Nepal has also been ordered to pay certain sums to Axiata UK and Ncell, being a sum of approximately $1.4m to Axiata and to reimburse Ncell for the cost of a loan taken out by Ncell. No sums are payable by Axiata UK or Ncell under the award.”
On 20 May 2019, Axiata filed a case against the Nepal government in the determination of CGT on the purchase and sale of the company's ownership claiming damages worth $420m (Rs 55.54bn). Axiata claimed that Nepal’s conduct in relation to CGT imposed on Ncell goes against the Bilateral Investment Treaty between Nepal and the United Kingdom. The taxation controversy began with the exit of TeliaSonera, a Swedish-Norwegian company, from Nepal, after it sold 80 percent stakes to Axiata, in April 2016 at Rs 144bn. The buyout deal was done abroad as Axiata Investment (UK) purchased the Reynolds Holding company, registered at Saint Kitts and Nevis, a tax haven, which is the owner of Ncell, from TeliaSonera. The 54th annual report of the Office of the Auditor General became the turning point to drag Ncell into controversy related to tax evasion. The Office of the Auditor General (OAG) of the Nepal government in its report stated that the deal was taxable in Nepal as per Clause 57 of the Income Tax Act and stated that the government needs to raise Rs 32 billion as CGT from the buyout deal worth Rs 144bn for an 80 percent stake. Then, the Large Taxpayers Office of the Nepal government determined Rs 60bn in CGT to Ncell. The Malaysian telecom giant went to the Supreme Court to challenge the decision but the court quashed the petition of Axiata before moving to ICSID.
