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Mexican court annuls First Majestic Silver tax agreement

Bnamericas Published: Thursday, September 24, 2020
Mexican court annuls First Majestic Silver tax agreement

A Mexican court annulled an agreement allowing taxes to be charged at a lower rate on silver sales from First Majestic Silver’s San Dimas mine.

The federal tribunal of administrative justice (TFJA) ruled in favor of a petition by tax authority SAT to terminate the agreement, which was signed by SAT in 2012, local news website Mural.com said.

The advance pricing agreement allowed First Majestic subsidiary Primero Empresa Minera to pay taxes on realized silver prices.

Under a streaming deal, Primero sold the bulk of silver produced at San Dimas to Wheaton Precious Metals for around US$4/oz, well below the spot price.

Vancouver-based First Majestic announced a notice of intent to submit an international arbitration claim against Mexico relating to the dispute in May, saying SAT had disregarded the advance pricing agreement and breached provisions of three double taxation treaties.

The TFJA ruling can be appealed, the report said.

Coeur Mining has also confirmed a notice of intent to submit a claim under international arbitration against Mexico relating to a tax dispute.

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