Re: The mining data question
in response to
by
posted on
Dec 31, 2018 11:14PM
Crystallex International Corporation is a Canadian-based gold company with a successful record of developing and operating gold mines in Venezuela and elsewhere in South America
Taxes are complex. I'm not sure about the tax treatment coming out of CCAA. Certainly in the case of a takeover I would agree with you. The award was dated 2008 so I would expect most losses to offset for tax purposes. I think ICSID accepted Crystallex's claim of $645m of costs (although they didn't use this for the award).
Otherwise, awards are generally treated as lost profits so subject to full taxes, however it is possible Crystallex will argue these profits would have occurred over a period and therefore taxed as such. I don't recall what ICSID used, was it 20 years or 40 years? Of note is that ICSID did not allow Crystallex's claim for the award to be net of both VZ (34%) and Canadian (31.4%) taxes, so it will be subject to tax in both jurisdictions.
Regardless any loss / tax treatment will be the same for all shareholders. The lower the tax the better for all (except the CRA).