RIO DE JANEIRO, Aug 29 (Reuters) - Brazilian miner Vale SA said on Friday that a court had upheld a decision freeing the company from paying taxes on profits made abroad, potentially paving the way for Vale to demand a $10 billion refund on a settlement payment.
After years of legal battles, Vale agreed to pay Brazil 22.3 billion real ($10 billion) last November in return for a hefty discount on the taxes the government said Vale owed.
Vale always claimed it had already paid tax on these earnings abroad and it was therefore exempt from paying them again in Brazil.
A court decision in April supported Vale’s view. The finance ministry appealed and this appeal was rejected this week.
Brazil’s finance ministry says the deal in November means Vale cannot get a discount or refund on the payment regardless of the court decision. But Vale has never renounced its position and previously said it will demand repayment if the courts decide it did not owe the taxes.
The decision by Brazil’s Superior Justice Tribunal (STJ) to reject the appeal by Brazil’s finance ministry this week is by no means the end of the affair. Further legal avenues remain before a definitive decision is made, with the country’s Supreme Court sitting above the STJ.
Vale said in an emailed statement to Reuters that it was “considering its next steps.” (Reporting by Marta Nogueira and Stephen Eisenhammer; Editing by Grant McCool)