Brazil’s Government wins latest round in Vale tax match
Brazilian mining giant Vale (NYSE:VALE) announced the country’s Superior Court of Justice ruled in favour of the federal tax authority in its appeal against an injunction granted in March suspending payment of taxes on overseas profits by the company.
The resolution implies the world’s largest iron ore producer and a top nickel miner will continue to be chased by the government for nearly $17.4 billion in back taxes, in an ongoing dispute that began about 10 years.
Vale will also have to post bond with the court to continue contesting the assessments regarding Brazilian income tax and social contributions on the net income of its non-Brazilian subsidiaries and affiliates, the statement said.
The company said it “remains confident in its arguments” and will continue to pursue “all available means to ensure its right to defend itself.”
Vale has been facing price fluctuations, growing costs and mineral reserves depletion, which is obstructing production growth, according to analysts surveyed by Fox Business. These factors have depressed Vale’s share performance since August and will continue to make 2012 a challenging year, they said.