Canada’s silver producer Primero Mining (TSX:P)(NYSE:PPP) could throw a wrench into the North American Leaders’ Summit next week, as the miner wants Ottawa to intervene in its tax dispute with Mexico.
The Toronto-based company, which owns the San Dimas gold-silver mine in Durango, Mexico, launched earlier this month a NAFTA challenge against the Mexican government arguing that local tax authorities were trying to improperly collect more taxes from them.
The dispute between Primero Mining and Mexico centres on how it is taxed on the sale of its silver, which the company has called it “neither fair nor equitable.”
The dispute centres on how the Mexican government taxes the foreigner miner on the sale of its silver.
In 2012, a Mexican court ruled Primero should be taxed based on what’s known as the “realized price” of the metal, which is a slightly over $4 an ounce. This price is much lower than the market value for silver, which is currently trading above $17 per ounce.
The Canadian firm had argued it should be taxed at the lower rate because it is contractually required to sell a large portion of its output to another company, Vancouver-based Silver Wheaton (TSX, NYSE:SLW), at the lower realized price.
But in February, the Mexican tax authority — SAT — decided to retroactively overturn that 2012 deal.
In its latest statement, Primero accused SAT of being “neither fair nor equitable” in its actions towards the company.
cont. http://www.mining.com/primero-mining-wants-canadian-govt-intervene-tax-dispute-mexico/
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