Brazilian appeals court justices have lent Vale S.A. officials a partial victory in their ongoing, $10 billion battle with government officials over the taxation of its overseas subsidiaries; the Rio de Janeiro-based Vale is the world’s biggest iron ore miner and its No. 2 mining company overall.
The Superior Justice Tribunal, the last court of appeal below the Supreme Court, ruled 3-1 that treaties with Belgium, Luxembourg and Denmark prevent Latin America’s largest nation from taxing Vale units in those countries, according to the court’s press office.
Vale, which has operations in 30 countries, declined immediate comment or indication of how much business is impacted by the units, according to Reuters News. In the past, however, Vale has contended tax assessment on subsidiaries that already pay levies to foreign host governments render it uncompetitive against rivals based elsewhere.
The Finance Ministry in Brasilia promised to appeal, adding the new decision will not affect Vale’s $10 billion, Q4 2013 settlement. Under that agreement, ministry officials said in a statement, the company has surrendered its right to rebates for assessments between 2003-2012, except for part of 2005.