Tax Reporting

We see responsible taxpaying as an integral part of our operations and a way to create shared and sustainable value for our stakeholders, giving back to and serving our communities. This philosophy informs our approach to tax and investment. 
As a global enterprise, we are subject to multiple tax obligations, including royalties and other taxes on natural resource extraction. In Brazil, some states have industry-specific taxes on mining and related activities. Vale has a dedicated team of professionals with in-depth expertise and robust internal audit processes that review our tax reporting practices and procedures.  

Taxpaying is a core part of the relationship between corporations and society, supporting the development of local, national and global economies. That is why we take our tax responsibilities seriously.  

In 2023, Vale paid 

US$ 6.1 billion

in taxes, with more than 96% of this amount being paid in Brazil.
Over the past decade, our total economic contribution has reached US$ 356 billion. 

US$ 356 billion. 

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Our tax approach is based on five fundamental principles: 

  •  Transparency 
     
  • Creation of long-term value 
     
  • Effective risk management and control 
     
  •  Excellence in compliance 
     
  • Proactive and open engagement with tax authorities and stakeholders 
As part of our ongoing commitment to enhance transparency, since 2019 we have published a Tax Transparency Report describing the taxes we pay and how they contribute to our communities. In it, we report on taxes and royalties by country and by site, broken down into federal, state and local taxes. These voluntary reports are prepared in line with Global Reporting Initiative (GRI) Standard 207 – Tax.  

Every three years, we undergo assessments by the Extractive Industries Transparency Initiative (EITI). In the most recent assessment, in 2021, EITI highlighted our good practices and commended our compliance with the expectations set for companies supporting this initiative. 
 
Corporate income taxes  - US$ 1,918MM  Based on information available in Norte Energia's Sustainability Report, there is a monitoring plan, with identification of the resulting impacts, which has been implemented, configured by the Integrated Management Plan of Volta Grande do Xingu. This plan was consolidated in 2011, when the Basic Environmental Project – PBA was presented, then composed of 05 (five) subprograms, among them the Navigability and Living Conditions Monitoring Program, in addition to the Aquatic and Terrestrial Ecosystem Conservation Plans and the Water Resources Management Plan. Norte Energia discloses on its website regular bulletins of flows and levels of the Xingu River, with maps and explanatory notes, providing access to information. 

The Social monitoring forum of the Belo Monte HPP (FASBM, Fórum de Acompanhamento Social da Usina Hidrelética de Belo Monte, in Portuguese) was implemented in 2011 as well, with a joint board formed by local and regional stakeholders, with periodic meetings to clarify doubts and exchange information about the Belo Monte Hydroelectric Plant. According to information provided by Norte Energia in its Sustainability Report, meetings, participative workshops, or technical visits are held with representatives from the communities, where civil society, local municipalities, Ibama, and other interested parties participate. The FASBM also counts on other participatory instances, among them Volta Grande do Xingu commission – CVGX (Comissão da Volta Grande do Xingu, in Portuguese) and Fisheries and aquaculture commission – CPA (Comissão da Pesca e Aquicultura) and promotes meetings of commissions and specific thematic committees to enable the appropriate amplitude of the dialogue. 

As indicated in Norte Energia's Sustainability Report , the Belo Monte HPP meets all the requirements and the conditioning factors of the Environmental Licensing process, through the Environmental Impact Study (EIA/RIMA), conducted in conjunction with Ibama teams dedicated to the analysis of the documents, participating in meetings in the region and in regular inspections. The Belo Monte HPP also complies with the requirements of the Equator Principles referenced by the International Finance Corporation (IFC).  

Norte Energia also reports quarterly compliance with the Performance Standards on Socio-Environmental Sustainability, according to the standard established by the IFC, and this process is audited by an independent consulting firm of the financing banks. Therefore, given the environmental licensing process, monitoring, development of participatory processes and independent monitoring, it is demonstrated that all socio-environmental measures have been observed, and the foreseen and generated impacts have been mitigated, compensated and monitored, in compliance with legal requirements and those agreed upon with society (Source: Sustainability Report). 

In addition to the commitments established under the environmental licensing process, Norte Energia in its first ten years of execution (2011-2021) supported 363 projects distributed over 342 thousand km² of area of operation and the amount of approximately R$ 305 million, distributed as follows: 48.8% of the projects were executed in the sphere of civil society, 32% in actions in the municipal government, 8.5% in the Federal Government, 8% in the state government and 2.8% in the management of actions and projects directed to the Plan for the Sustainable Regional Development of the Xingu-PDRSX. These are voluntary actions that seek to contribute to and strengthen the socioeconomic development of the region and the environmental protection of the Xingu basin. In 2022, it valued ESG aspects in its management, presenting a letter of request to join the UN Global Compact. (Source: Norte Energia's 2022 Sustainability Report). 
Payroll taxes  - US$ 1,097MM
Tax on mining  - US$ 1.312MM
Taxes on product and service  - US$ 1.612MM
Other taxes  - US$ 175MM
Workforce  - 215.347
Total taxes - US$ 6,112MM
Tax payments by region
(in US$ million)
Tax payments by level of government
(in US$ million)

Controlled Foreign Corporation (CFC) Taxation 

All Vale entities are subject to CFC rules as Brazil is the jurisdiction of our ultimate parent entity. Brazilian CFC rules are among the strictest in the world, as they require the taxation in Brazil of the statutory profits of all direct and indirect foreign subsidiaries and affiliates, regardless of their location. All such profits are taxable based on ownership percentage at a statutory rate of 34%, with compensation for corporate income tax paid abroad. 

Tax incentives 

We access tax incentives in some of the jurisdictions in which we operate, which are available to all taxpayers. In some cases, tax incentives are dependent on meeting certain threshold criteria in relation to employment or economic activity in our wider supply chain. None of the regimes under which Vale has been granted incentives are noted by the OECD as being a harmful tax practice. 

The total amount of incentives available for Vale in Brazil for the year 2023, were nearly $ 1.2 billion, of which 88% corresponded to incentives related to operations in the north region of Brazil (SUDAM).
In Brazil, in 2022, the total amount of incentives available to Vale was approximately US$ 1.4 billion, with nearly 90% of this amount being related to our operations in Brazil’s North. This includes incentives linked to investments in the Amazon Development Agency (SUDAM). In the North, we have a workforce of approximately 50,000 people, including 16,000 direct employees. To support investments in the region — which accounts for 60% of our production output — the proceeds from these incentives cannot be distributed to shareholders.