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01 Jul 2019 | 07:39

Fresnillo expects profits to take $8m hit from tax tweak

Fresnillo said it expected profits to take an $8m hit after decided it was in the company's 'best interests' to retrospectively align its tax treatment across its underground mining operations subsidiaries for the years 2014 to 2018 with a tax structure previously agreed with Mexico's tax ombudsman and tax authorities. Fresnillo said it had now determined it to be in the company's best interests to align its tax treatment across its underground mining operations subsidiaries with an agreement signed last year between Mexico's tax ombudsman and tax authorities. As part of the move, the company had voluntarily elected to apply the same criteria regarding the tax treatment of mining works to all its underground mines, retrospectively for the years 2014 to 2018

The net impact on the profit & loss statement of US$8.0m. The total amended amount is US$55.3m of which US$39.6m, the principal amount, are income tax and mining rights and US$15.7m are interest and surcharges, the company said.

'This Principal Amount will be offset in future years by deducting depreciation from the tax base. The total amended amount of $55.3m has been covered as follows: US$22.2m against tax receivables and the remaining US$33.1m in cash. These effects will be recorded in the Company's results for the 6 months ending 30 June 2019,' it added.



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