Vale SA, the world's second largest mining company, has said the company is confident of victory in the ongoing back taxes case with the Brazilian tax authority.
The company revealed in its annual results that it has not fully provisioned for tax-related losses, but a legal note acknowledged the "reasonably possible but not probable" chance of losses as a result of ongoing tax disputes, being mainly the ongoing case with Brazil on back taxes, worth BRL25bn (USD13.9bn).
At the end of last year the company received an unfavourable ruling from the 2nd Federal Regional Tribunal, which dismissed its argument that the taxation of its foreign-sourced income amounts to double taxation and therefore contravenes Brazil's constitution. The Tribunal upheld a previous ruling that the overseas operations income of Brazil-based multinationals should be taxed in Brazil even if such income is also taxed in another country.
In response, the company stated that despite the Tribunal's ruling in December 2011 it had since obtained "favourable decisions" from the authorities on tax administrative matters and confirmed that the latest ruling was expected to have "no immediate economic and financial impact" on the company. "The matter of foreign profits has not been defined yet and it will still be subject of appeal to the Superior Court of Justice and to the Supreme Court of Justice," the company said in a statement following the ruling.
On January 30, 2012, the company was successful in obtaining an injunction "suspending the effects of the unfavourable rulings related to taxation on foreign subsidiaries earnings". The injunction means that the legal proceedings will return to the Board of Tax Appeals (CARF) for judgement. However, the company said that no specific deadline has been set for the resolution of the dispute.
Brazil's National Department of Mineral Production is expected to clarify its position on royalty back payments this month.
.Tags: tax | law | business | multinationals | court | corporation tax | Brazil | mining | royalties | tax authority
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment