Vale Tax Dispute Ruling at Brazil High Court Slated for Nov. 26
The possible ruling date for $13.2 billion in taxes for profits from overseas units of Vale, the largest iron-ore exporter, was published today by the tribunal on its website.
“In our view, the November 26 settlement date throws Vale a lifeline ahead of the government’s deadline of its tax proposal to Vale,” Andreas Bokkenheuser, an equity analyst at UBS AG, said by e-mail. “Needless to say, a favorable ruling would ensure Vale materially higher bargaining power in its future tax negotiations.”
The South American country is asking Vale, the world’s third-largest mining company, to pay 30.5 billion reais ($13.2 billion) in taxes for 1996 to 2008, the company said April 2 in a U.S. regulatory filing. The Rio de Janeiro-based company expects Brazil to file additional claims for the years after 2008.
Vale’s press office declined to comment in an e-mailed statement. The company has enough time to make a decision on the possible tax settlement before the Nov. 29 deadline, Chief Executive Officer Murilo Ferreira told reporters on Nov. 7.
Brazil’s Congress approved in September a regulation that scraps fines, interest and legal charges if companies pay their debts in one tranche and reduces taxes and interest if they pay debt in installments.
To contact the editor responsible for this story: James Attwood at email@example.com