Kinross has mines and offices in eight countries and accordingly is subject to various taxes, as determined under the tax laws of the countries in which we operate.
The Company’s adjusted effective tax rate was 34.8% in 2013 (based on adjusted net earnings). The Company’s effective tax rate can be affected by a number of factors on an annual basis, including the geographic distribution of income, varying rates in different jurisdictions, the non-recognition of tax assets, mining allowance, foreign currency exchange rate and changes in the tax laws.
Some of our operating properties are held indirectly through subsidiaries organized under the laws of and domiciled in countries other than Canada or the jurisdiction in which our operations are located. All of these countries are included in the Organization for Economic Cooperation and Development (OECD) “white list” (May 2012) of countries that are implementing the internationally agreed tax standard endorsed by G20 Finance Ministers at their Berlin Meeting in 2004 and by the UN Committee of Experts on International Cooperation in Tax Matters at its October 2008 Meeting.
Corporate transactions with and through these subsidiaries are fully disclosed to all relevant tax authorities. According to accepted international practice, all transfers of goods and services between companies within the Company are conducted on an arm’s-length basis. The transfer pricing of such transactions between our companies is in compliance with all current legislation and is based on fair market terms and reflects the commercial nature of the transactions.
Kinross is a member of the Extractive Industries Transparency Initiative (EITI).