Brazil appeals court rules in Vale's favour over $10bn tax bill
Brazil's Superior Justice Tribunal, the country's second highest court, on Thursday ruled in favour of iron ore giant Vale SA (NYSE:VALE) in a dispute over taxation of foreign subsidiaries.
Reuters reports the court ruled 3 to 1 that Brazilian treaties with Belgium, Luxembourg and Denmark prevented Brazil from taxing the profits of Vale units in those countries, although it also said taxation of company's profits in Bermuda are valid.
In November last year Vale, the world's largest iron ore producer and top nickel miner, agreed to pay the Brazilian government $9.6 billion to settle a decade-long dispute over the back taxes, after the country’s tax authority offered to reduce the firm's original $14 billion bill.
The Rio de Janeiro-based company paid $2.6bn up front, with an additional $7bn over the next 15 years.
After the news emerged near the end of trading, Vale shares jumped more than 2% higher in huge volumes and in after hours trade in New York the $70 billion counter gained another half-percent.