The companies Samarco and Vale were fined R$1.92 billion for trying to deduct from Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) amounts relating to expenses with environmental repairs and fines. These expenses were related to the collapse of the Fundão dam, which occurred in 2015, in Mariana, Central region of Minas Gerais.
According to the Attorney General’s Office of the National Treasury (PGFN), which represents the Union in the process, the Administrative Council of Tax Appeals (CARF) maintained the tax assessments, considering that the companies tried to deduct taxes improperly. The PGFN argued that the expenses do not meet the legal criteria of necessity, normality and usuality for tax deduction.
The expenses included amounts from legal agreements signed with the Federal Public Ministry, the Federal Public Defender’s Office and affected municipalities, in addition to environmental fines. The decision can still be challenged on appeal. Samarco informed that it will discuss the issue in the case files, while Vale argued that the deduction is applicable, as indemnity and compensation payments reflect mandatory expenses arising from the company’s objective liability for repairs.
