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Brazilian mining company Vale SA (VALE, VALE5.BR) said Friday it has presented a letter of guarantee, or bond, worth 1.7 billion Brazilian reais ($902 million), to Brazil's federal tax authority.
The bond, presented in accordance with a court ruling, covers a claim for supposed taxes due on income of Vale's non-Brazilian subsidiaries and affiliates abroad, for the period 1996 through 2002, Vale said in a statement.
Vale noted that a Brazilian High Court of Justice ruling currently bars any administrative or judicial measure for the collection of claims related to foreign profits. However, the tax authority, in disregard of the content and scope of that decision, sought an order requiring a bond, which was granted by a court, Vale said. Vale has provided the bond in compliance with that court's determination, it said in the statement.
The posting of the bond doesn't represent a defeat for Vale in the judicial proceedings, the mining company said.
"Vale remains confident in its positions and will continue to pursue all appropriate legal actions until a final decision on the merits is reached," the company said.
Vale is currently being pressed for tax claims totaling more than $20 billion at the Brazilian federal and state levels and from abroad, according to recently published company data.
Of this total, the mining company is being charged $16.3 billion by Brazil's federal government for taxes on the profits of its overseas subsidiaries, according to its 2011 annual 20-F report. The constitutionality of Brazil's tax claims against companies' overseas subsidiaries is being challenged in court action brought by Brazil's industries confederation CNI.
-By Diana Kinch, Dow Jones Newswires; 55 21 2586 6086; firstname.lastname@example.org