By Rogerio Jelmayer
SAO PAULO--Mining giant Vale SA (VALE), the world's top iron-ore
producer, won a partial victory in a tax dispute with the Brazilian
government over taxes on profits from overseas operations.
Brazil's Superior Court ruled Vale units in Denmark, Belgium,
and Luxembourg must pay taxes in those countries but not also in
Brazil because those countries have agreements with the Brazilian
government that bar double taxation.
Vale and other Brazilian companies have been forced to pay taxes
in other countries in which they operate and in Brazil.
Brazil's federal government said it would appeal the decision to
the Supreme Court.
However, the Superior Court ruled Vale must pay taxes in Brazil
over its activity in Bermuda because Brazil has no agreement on
double taxation with the government there.
Vale didn't comment on the court decision nor the disclose the
amount of taxes on those international units.
The tax dispute hurt Vale's results in the fourth quarter of
2013, when the company suffered its biggest quarter loss ever. Vale
reported a net loss of $6.45 billion for that quarter, more than
double the $2.65 billion loss posted in the year-before period.
Vale attributed the losses to an agreement set in November to
pay 22.33 billion reais ($9.9 billion) to the Brazilian government
to settle a dispute over back taxes it allegedly owed for profits
on its overseas operations.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
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