New tax laws in Brazils Pará state will
increase costs for Norsk Hydro ASAs alumina and bauxite
business by about 60 million real ($24.8 million) per quarter,
the company said Jan. 29.
The increase stems
from Parás decision to change its collection point
of the ICMS tax, which is levied on goods and services and
collected by Brazilian states, on fuel oil purchases.
The aluminum industry
in Pará has an ICMS deferral, which needs to be renewed
by July 2015, that provides an exemption on intrastate
purchases of goods and services, Oslo, Norway-based Norsk Hydro
said. However, the recent changes on fuel oil will move the
collection point of ICMS taxes to oil refineries, located
outside the state of Pará, from distributors, the
Alumina do Norte do Basil SA (Alunorte) alumina refinery is in
the state and will be subject to the ICMS tax starting Feb.
"We are concerned
about the sudden changes in tax legislation in Pará, and
we are doing what we can to try to get the decision reversed in
dialogue with Pará legislators," Johnny Undeli, Norsk
Hydros executive vice president of bauxite and alumina,
said in a statement.
paid ICMS taxes on fuel oil for three quarters in 2012 before
the decision was reversed.
Norsk Hydro and its
electricity supplier have agreed to pay ICMS taxes on the
purchase of electricity by Alunorte and the
Mineração Paragominas bauxite mine, also in
Pará, in the period following Feb. 28, 2011, Norsk Hydro
said, referring to the date it closed its purchase of Vale
SAs bauxite and alumina assets in Brazil (
amm.com, Feb. 29, 2011).
ICMS will be charged 8
million real ($3.3 million) per quarter for electricity
purchases, mainly increasing the cost at Paragominas.
A version of this
article was first published in AMM sister publication Metal