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Brazil hits Vard with $31m 2010 tax claim

Brazil hits Vard with $31m 2010 tax claim
Offshore shipbuilder Vard has received an NOK200m ($31m) tax claim from Brazilian authorities relating to the financial year 2010.

An assessment of the taxing of goods transferred between Norway and the group's Brazilian yard at Niterói undertaken by the Brazilians uncovered conflicting transfer pricing rules.

The company had previously made no provision for the claim after receiving legal and tax advice on the issue, given the perceived low likelihood of the assessment going against them.

Vard is now reconsidering the likely outcome of the dispute, and will release further details on any provisions in its third quarter results later this year.

The claim, which Vard will appeal against in a process that may take several years, includes penalties and interest on the outstanding sum stretching back to well before Fincantieri bought a majority stake in STX OSV in late 2012 and the company rebranded as Vard in early 2013.

Vard's Niterói yard has struggled with delays and an ongoing restructuring process over the past two years, and in its second quarter results the group referred to the business environment in Brazil as ""challenging".