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Thursday, 3 March 2016

Goldcorp challenges Mexico's tax laws, and loses

A Mexican subsidiary of Canadian mining giant Goldcorp has been denied an injunction challenging the constitutionality of federal tax reforms that were brought into effect on January 1, 2014. The reforms established a special duty of 7.5 percent to net income on the disposal or sale of extraction activities, with an additional 0.5 percent tax on income from the sale of gold, silver and platinum.
Goldcorp's vision, values, and "six pillars".

The Goldcorp subsidiary, Minas de la Alta Pimeria, put forth an extraordinary challenge. According to Mexico’s Federal Judiciary Council (Consejo de la Judicatura Federal, or “CJF”), the mining company wanted to pay per unit of measure, and not by the value of gold extracted. In effect, it would pay the equivalent taxes on a kilo of coal as on a kilo of gold.

In its legal claim, the company stated that the “constituent does not have powers to establish these rights and added that the amounts are not proportional or equitable.” How Goldcorp felt it could challenge the powers of the federal government of Mexico to establish its own tax laws is hard to understand.