Vale SA (VALE3) is being investigated in Switzerland for allegedly abusing tax benefits it was granted in 2006, O Estado de S. Paulo reported, citing Jean Michel Favez, a member of the finance commission in the canton of Vaud.
Vale is accused of using its Swiss office as the destination for its global profits, in order to avoid paying tax, according to the newspaper.
The Brazilian mining company was excused from paying 80 percent of federal tax and 100 percent of local tax in Switzerland on condition that it created local jobs and that profits in its Swiss office would not exceed $50 million, according to O Estado. Vale registered profit of more than $5.6 billion in Switzerland in 2006 and didn’t create the jobs it promised, the newspaper said.
Vale declined to comment on the legal process and said it always complied with the legal and economic requirements demanded by the Swiss authorities in return for the tax breaks, according to O Estado.
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