Wheaton Precious Metals reaches settlement on Canadian tax dispute regarding foreign income

by Keith Powell
Wheaton Precious Metals Corp. logo

— Photo courtesy Wheaton Precious Metals Corp.

Wheaton Precious Metals™ Corp. is very pleased to announce that it has reached a settlement with the Canada Revenue Agency ("CRA") which provides for a final resolution of Wheaton's tax appeal in connection with the reassessment under transfer pricing rules of the 2005 to 2010 taxation years related to income generated by the Company's wholly-owned foreign subsidiaries ("Wheaton International") outside of Canada.

Settlement Highlights

  • Foreign income on earnings generated by Wheaton International will not be subject to tax in Canada.

The service fee charged by Wheaton for the services provided to Wheaton International will be adjusted to:

  • include capital-raising costs associated with Wheaton for the purpose of funding streaming transactions entered into by Wheaton International; and
  • increase the mark-up applied to Wheaton's cost of providing services to Wheaton International, including the above capital-raising costs, from the current 20% to 30%.

This additional service fee will result in increased income generated by Wheaton in Canada that is subject to Canadian tax.

  • Transfer pricing penalties in the Reassessments will be reversed. Interest will be adjusted consequentially to the adjustments described above, subject to some minor adjustments.
  • These transfer pricing principles will also apply to all taxation years after 2010, including the 2011 to 2015 taxation years which are currently under audit and on a go forward basis.

After the application of non-capital losses, Wheaton does not anticipate any additional cash taxes will arise in respect of the 2005 to 2010 taxation years as a result of the settlement. 

"The terms of the settlement are an excellent outcome for Wheaton and its shareholders," said Randy Smallwood, Wheaton's President and Chief Executive Officer. "This settlement removes uncertainty with the use of our business model going forward and puts the tax issue behind us so that we can continue to focus on what we do best: building and managing our high-quality portfolio both organically and by accretive acquisitions, as we did earlier this year with the transactions on Vale's Voisey's Bay Mine and Sibanye's Stillwater Mines. With the clarity provided by this settlement, I look forward to our company again being valued solely based on the virtues of its excellent portfolio of high-quality assets and strong growth profile over the coming years."

Related articles

The Royal Canadian Mint's 40th Anniversary of the Gold Maple Leaf bullion coin.
Mining Insider, Minerals, Mines, Global The Royal Canadian Mint celebrates 40 years of leadership and innovation

The Royal Canadian Mint is proud to launch a special 40th anniversary edition of the Gold Maple Leaf

Mairead Lavery, new President and Chief Executive Officer for Export Development Canada.
Mining Insider, Mines, Global New President and CEO, Mairead Lavery takes over at EDC

EDC strikes anything related to coal from financing portfolio & announces new CEO

The Lac des Iles Mine in a low-risk jurisdiction northwest of Thunder Bay, Ontario.
Mining Insider, Mines, Ontario North American Palladium releases 2018 production results, operational and safety improvements

North American Palladium is the world’s only pure play palladium producer.

View all Mining Insider articles