SAO PAULO (Reuters) - Brazil's highest court suspended on Wednesday the payment of about24 billion reais ($12.4 billion) in back taxes by mining companyVale, handing the world's largest iron ore producer a temporaryvictory in a dispute with the government. Justice Marco Aurélio de Mello at the Federal Supreme Courtsaid a claim by the Finance Ministry's legal adviser to demand animmediate payment by Vale was not possible until the court, knownas STF, discussed it in a plenary session, according to a rulingdistributed by email. Vale is fighting four actions by the Vale wins court injunctionbarring $12.4bn tax debt repayment, which claims the mining firmhas avoided paying levies on profits obtained at some of itsforeign subsidiaries. The Rio de Janeiro-based company says it hasalready paid this money to foreign governments and taxing thecompany again is an unfair burden. |
"I submit this to a plenary vote so, jointly, the court decideswhether the claims go against the country's Constitution," Mellosaid in his ruling. Shares of the company, which have fallen 2 percent over the past 12months, have suffered in the wake of the dispute, one of thenation's biggest against a single company. The dispute underscoresthe political and regulatory risks that companies the size of Valeface around the world as governments seek to take greater controlof national resources. Vale has in recent years been the subject of government pressure toinvest more in projects that create jobs but are detrimental toprofits. The government's tax claims, which date back from theearly 2000s, amount to more than half Vale's $22.9 billion profitin 2011 and nearly all of its 2010 profit.
The tax dispute could also mark a setback for Vale's overseasgrowth strategy. For years, Vale sought to become the world's topdiversified miner by boosting revenue from sales of metals andminerals other than iron ore. If the decision holds up in the courts, it could open the door forcases against other Brazilian-based companies that have taxliabilities on foreign earnings. A spokeswoman for Vale in Rio de Janeiro said the company would notcomment on the STF decision.
Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now.
The e-commerce company in China offers quality products such as 200 Series Stainless Steel Manufacturer , China Stainless Steel Angle Brackets, and more. For more , please visit Stainless Steel Sheets today!
Related Articles -
200 Series Stainless Steel Manufacturer, China Stainless Steel Angle Brackets,